Newly established social care provider Caledonia Social Care has become Scotland’s latest business to adopt the employee ownership model, launching on EO Day.

With a projected annual turnover of £2.5 million, Caledonia Social Care will focus on care at home support, including the provision of dementia specific services, alongside personal care to older, disabled and vulnerable people.

Alzheimer Scotland will initially be the main investor but plans to hand it over fully to the newly formed enterprise in the future. This is the first time a Scottish charity has transferred one of its service functions into employee ownership.

We caught up with Margaret Paterson, managing director of Caledonia Social Care, to find out more about the move.

Stuart Robertson, Regional Manager; Margaret Paterson, Managing Director and Derek Oliver, Regional Manager at Caledonia Social Care

I am thrilled to be officially celebrating the opening of Caledonia Social Care on Employee Ownership Day. Our dynamic employee-owned business model takes forward ownership of many of Alzheimer Scotland’s previous care at home services to support people living with dementia in the community and our staff will be at the very heart of everything we do. As well as delivering care at home services we also offer personalised care to older, physically disabled and vulnerable people to help them remain in their own homes and to live as independent a life as possible for as long as possible.

Employee ownership is particularly suited to the social care sector as it is consistently shown to improve staff engagement and wellbeing, which can lead to better patient experience and outcomes. As owners, employees have a say in how the business is run, and clients and their families are reassured that the business will remain rooted in the area and be run for the benefit of local people.

The launch of Caledonia Social Care will be a real boost to Scotland’s care sector, with an empowered workforce of 150 employee owners, committed to providing an exceptional level of care to 480 clients.

Members of the Caledonia Social Care team

If you would like to learn more about employee ownership in relation to your business, please get in touch.

Sarah Deas Discusses EO Day 2017

Launched by the Employee Ownership Association (EOA) in 2013, today (30 June) marks the fifth EO Day (Employee Ownership Day) in the UK.  It is a national celebration of the many benefits associated with being an employee owned business, with the aim of raising awareness of the positive impact EO has on the UK economy.  With this in mind, we’re urging more business owners to explore employee ownership both as a viable succession route and as a catalyst for sustainable business growth.

When considering their exit strategy, the motivations for a business owner to go down the employee ownership route tend to focus on a number of key areas, such as rewarding and empowering loyal employees and rooting the business in the local community.

Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability, improved business resilience during times of recession, increased productivity and enhanced employee wellbeing.

Recent research showed there are 86 employee-owned companies in Scotland, with approximately 6,800 employee-owners generating a combined turnover of around £925million.  Furthermore, in the last five years the number of employee owned businesses operating in Scotland has trebled, so much so we are forecasting a ‘deal a month’ on average over the next year.

Over a ten year period we aspire to achieve a tenfold increase in employee owned businesses headquartered in Scotland, and with 16,000 employers in Scotland looking to transfer ownership in the next five years, we expect take up to continue accelerating.

Co-operative Development Scotland (CDS) can help you decide on the best model of employee ownership for your business.  If you would like to learn more, please get in touch and have a chat with our expert advisers.

Latest figures show that there are 86 employee owned (EO) companies operating in Scotland, with approximately 6,800 employee-owners generating a combined turnover of around £925million. With 12% of SME employers anticipating transfer of ownership in the next five years, it is expected that the take up of employee ownership in Scotland will continue to accelerate.

But what are the reasons behind the rising popularity in an EO structure and would it be suitable for your business? Sarah Deas, director at Co-operative Development Scotland, outlines five key benefits of employee ownership below.

Employee ownership is a succession solution

“If you’re a business owner considering the future of your business, employer ownership can provide a solution to managing your exit whilst achieving a competitive price and safeguarding the future of your business. It secures the long-term future of your company, retaining jobs, skills and investment, and is a succession option that should be explored by businesses of all sizes and sectors.”

Employee ownership can drive the performance of your business

“Having a personal stake in the business can significantly boost motivation among employees. Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability, improved business resilience during times of recession, increased productivity, enhanced employee wellbeing, and greater desire to innovate.”

The rewards of strong performance are shared with the employees

“Employee ownership is an opportunity to repay and strengthen the hard work and loyalty of staff with financial bonuses such as annual tax-free dividend payments. This incentive can further drive staff productivity and overall profitability as a result.”

Employee ownership roots the business in Scotland

“A businesses that is owned by its employees is more likely to remain rooted in its local community, providing jobs, retaining skills and generating wealth in the local area for generations to come. Businesses which chiefly serve their local communities can also benefit when the owners themselves have a strongly developed knowledge of the area.”

Employees are given a greater voice in the operation of the business

“Knowing the company better than anyone else, employees are well placed to give their input on key decisions such as ways to increase performance. As owners, staff feel more involved and engaged with the future of the business, driving job satisfaction and strengthening their commitment to the company.“

If you would like to learn more about how employee ownership could benefit your business, please get in touch.

Following on from our blog announcing this year’s Collaboration Prize winners, we’ll be taking a closer look at each of our winning collaborations over the coming weeks and learning more about their plans for the future. First up is Made in Scotland…

Made In Scotland – Collaborative Export Solutions

Made in Scotland – Collaborative Export Solutions is a collaboration of eleven companies involved in the luxury food and drink sector from across the Highlands and Islands.  By demonstrating particularly strong international ambitions to be delivered via the collaboration, it was awarded a special accolade at the HSBC Scottish Export Awards.

Made in Scotland offers a range of products including salmon, cheese, cakes and charcuterie as well as craft gin, craft beer and whisky. The collaboration will enable member businesses to offer the basket of Scottish produce to lucrative overseas markets by pooling together their resources and experience, both intellectually and financially.

We caught up with Willie Cameron from Made in Scotland who said:  “The idea was to create a route to market for high quality SME producers and to give them the resources like the big boys have that they could not afford as individual business operators.

“The great opportunity is that Scotland as a country is high on the world agenda and that is what we are cashing in on, i.e. both general interest and expats.

“One thing that has been extremely successful in particular is the cross-selling between some of the businesses within the collaboration.  In one instance a partnership has even been created through the purchase of a defunct brewery by two members.  Another venture is the introduction of one of the member’s ice cream products to seventeen outlets of another member.  None of this would have happened if it was not for the collaboration. It also helps to strengthen the bond between the companies.  Collaboration on sales and marketing has also lead to operational collaboration between member companies resulting in cost saving, new product development and in one case an acquisition.

“The Made in Scotland operational and funding model is ground-breaking, not only in Scotland but internationally.  It will drive international opportunities for Scottish-based SME food companies and thus help underpin the Scottish Government’s aspirations to double exports to £17.1bn by 2107.

“It was fantastic news to hear we had won the Collaboration Prize. The money and support will enable us to access expert advice on marketing food and drink on a global scale, as well as allowing us to develop our brand and create a website with e-commerce functionality. This will help us to really get our name and offering out there on a magnitude that would be far more difficult for us to achieve as individual companies.

“Not only does working together enable us to reach an international customer base as a whole, it also encourages us to support each other by highlighting new opportunities that we think will benefit individual members.  By continuing to collaborate, we aim to further boost Scotland’s global reputation as a producer of some of the finest food and drink in the world, hopefully attracting more of the country’s like-minded, quality producers to join us along the way.”

The member businesses in Made in Scotland are:

• Cobbs, Inverness
• Cairngorm Brewery, Aviemore, Highlands
• Shetland Distillery, Shetland
• R & B Distillers (opening distillery in Isle of Raasay, Highlands, and plans to open one in the Borders)
• Scottish Salmon Company (offices in Cairndow in Argyll and Bute, Isle of Lewis in Stornoway and Edinburgh)
• Bute Island Foods Ltd, Argyll and Bute
• Summer Harvest Oils, Crieff, Perth and Kinross
• Taste of Arran, North Ayrshire
• Braehead Foods, Kilmarnock, East Ayrshire
• Aldomak, Giffnock, East Renfrewshire
• Bondeau, Glasgow

We’re learning more about this year’s Collaboration Prize winners by hearing about their plans for the future in a new series of blogs.  In this blog we take a closer look at The Start-up Drinks Lab…

The two companies that form The Start-up Drinks Lab – Tongue in Peat and FOAL Drinks – are aiming to work together to solve challenges faced by drinks entrepreneurs in Scotland that result in them having to compromise on quality, cost or location.

Hannah Fisher from Tongue in Peat and Craig Strachan from FOAL Drinks

When we caught up with Hannah Fisher and Craig Strachan from The Start-up Drinks Lab, Hannah (founder of Tongue in Peat) said:  “Our main focus is to establish facilities to alleviate the manufacturing challenge created by the limited number of small scale manufacturing options for start-up drink businesses in Scotland.  We plan to do this by offering a full suite of services including product development, manufacturing, packaging and business support as well as providing a small scale bottling facility with pasteurisation, carbonation, capping and canning not currently readily available in Scotland.”

The consortium’s long-term plan includes both market and service expansion. Geographically, it will focus initially on Scotland then expand into the rest of the UK, eventually aiming to grow into Europe and even North America.

“As well as benefitting from the support, manufacturing advice and guidance of Scottish Enterprise, we will use the prize money to pay the first few months’ rental, meaning we can move in and fit out the factory.  Furthermore, we will be able to purchase our first pieces of equipment and engage experts to help fit the facility out to a full operational specification,” added Craig (founder of FOAL Drinks).

Hannah said:  “I met Craig at an Entrepreneurial Spark event where we quickly discovered our businesses faced similar challenges.  We then heard about the CDS Collaboration Prize and decided to enter.

“We have often talked about setting up small scale manufacturing facilities to benefit our own businesses but when going through the research process to validate our idea for the competition, we realised we were not alone in this pain point and that many great Scottish brands were forced to go down south to produce, losing that all important ‘made in Scotland’. We felt and continue to feel more passionate everyday about making sure we help Scotland and its produce by giving its producers an accessible platform.”

Craig continued: “Collaboration has been of massive assistance for my own company, FOAL Drinks, and for me personally. The anticipated cost savings by opening the lab will be of fantastic benefit, allowing us to be more competitive and provide our awesome customers with an even better offering.  Furthermore, our regular meetings and focus groups have been given a different perspective and have given us some excellent introductions, especially in the food and drink arena. This will be invaluable going forward and is especially important for start-up businesses.”

The member businesses in The Start-up Drinks Lab are:

• FOAL Drinks, Glasgow
• Tongue in Peat, Glasgow

Collaborating with other businesses can bring a number of benefits such as improved market presence, shared resources and knowledge, and the reduction of costs and risk when exploring new markets. Increasingly businesses are also coming together as a means of accessing larger contracts.

To learn more, we spoke to CDS advisors Gill Joy and Gavin Tosh, who have collaborated together themselves to provide unique specialist support to CDS clients on collaborative tendering.

Q1. Tell us a little more about yourself?

Gill: I have 30 years’ experience in business management and consultancy, focussing on collaborative projects and programmes. I set up Intend Business Development in 2006, which helps SMEs and social enterprises compete with larger national players on public sector tenders.

In 2011, Gavin and I decided to collaborate to design a new training programme for consortium bidding, working closely with the CDS team. We continue to tender jointly for various contracts where our complementary skills can add value for clients, and we have worked as CDS specialist advisors for consortium co-operatives since 2013.

Gavin: I am a practicing solicitor and started my own niche legal business in 2009 specialising in business law. Before I was a solicitor I was a contracts manager in large engineering-based companies, and was frequently involved in tendering for contracts, including collaboratively.

Q2. Why is tendering an important area for businesses, including SMEs?

Gill: £10billion worth of business is put out to tender each year in Scotland alone, with a huge number of private and third sector contracts also subject to a tendering process. These contracts will be for goods and services that smaller businesses are well placed to provide, yet so many SMEs aren’t going after them, essentially closing their doors to this enormous source of business.

Q3. What are the barriers for SMEs?

Gill: Particular barriers for SMEs include their small size, lack of specialist expertise, and limited resources to identify opportunities and prepare tender responses. Larger organisations can have in-house resources dedicated to the tendering process, but this is usually out of the question for SMEs. Small companies are encouraged by buyers to form consortia in order to bid for contracts, however, sometimes collaboration can be viewed as a barrier in itself. Most SMEs don’t really know where to start, from finding the right partners to getting a sound agreement and working together to create a winning bid.

Q4. How can collaboration help?

Gavin: By collaborating with other businesses, increased capacity and a wider range of available resources and skills make it possible to bid for larger contracts. Coming together under a single brand in a consortium co-operative can really consolidate the members’ joint offering and put them on an equal footing with larger companies pitching for the contract. With each member business focusing on its own strengths, the customer gets a team of true specialists in their respective fields instead of a larger organisation which may not be strong in all areas.

Gill: Collaboration also means more eyes out there to spot opportunities in the first place, and the costs and time involved in the tendering process are shared, making it less of a burden on smaller businesses. An added benefit of working closely with other businesses is the significant amount of organisational learning that each partner can derive from the experience.

Q5. What are the options?

Gavin: There are different ways to collaborate when tendering. The most common approach is to have a main contractor with a number of subcontractors, however, this is rarely a collaboration of equals. Subcontractors may have little say in important decisions and can be subject to the whims of the main contractor in terms of what work they get and when they are paid.

Tools and techniques to improve the position of subcontractors in this position are available, however for a truly co-operative collaboration where all parties have an equal say, there is also the consortium co-operative model.

In a consortium co-operative, members work together for a common goal whilst retaining their own brands, identities and control. Members can be limited companies, partnerships or individuals and the membership can be of any size from two businesses upwards. Each member business has an equal say on consortium activity, no matter its size, and both exiting and bringing in new partners is simple. As a recognised legal entity with limited liability, the model provides a durable yet flexible framework for collaboration.

Q6. What support is available?

Gavin: CDS’s principal form of support is called Consortium Expert Support – it is free of charge to eligible businesses and provides assistance to form a consortium co-operative. You can get in touch with CDS for more information about consortium support.

Q7. Are there any examples of successful consortium tendering?

Gill: A CDS client which has experienced success in tendering is The Wee Agency, a collaboration between a group of PR, IT and design firms to offer an integrated digital marketing service. The members were already collaborating on an informal basis, but bringing their skills together under a single brand has enabled them to successfully pitch for more ambitious contracts.

Gavin: Another consortium which has seen great results from tendering is the Community Resources Network Scotland (CRNS) Reuse Consortium, a nationwide collaboration between social enterprises managing waste resources at a local level through recycling, reuse and reduction. It won a contract from Fife Council to supply second-hand household essentials such as white goods and furniture to be given to locals on low incomes who need them, and hopes to support other local authorities in this manner in future.

We’re taking a closer look at each of our winning collaborations over the coming weeks and learning more about their plans for the future.  In this blog we learn all about Terrier Risk Partners…

Terrier Risk Partners – Tom Inglis of Wildcat Applications and Alison Stone of 3 Minutes to Midnight

Terrier Risk Partners comprises two experienced businesses coming together to provide cyber security solutions to SME’s in order to tender for larger contracts.

Together the businesses wanted to capitalise on initiatives offered by the Scottish Government, such as the Digital Scotland Superfast Broadband, by offering expertise in the fields risk assessment, business continuity , protection and recovery

The consortium is a combined offering for firms who have identified a need to improve their ability to protect against and recover from IT related disasters.  It aims to provide a 360 degree review of each organisation’s risk exposure and then recommend solutions that are appropriate to the size, needs and budgets of their clients.

Tom Inglis from Terrier Risk Partners spoke to us:  “We strongly believes that the services we are offering are valuable to businesses and supply a solution to problems identified by the Scottish Government, industry bodies and academic research.

“Following our win, we intend to fund the creation of a brand, website and various other marketing materials.

“The business support we will receive from winning is extremely important as it will help us to grow the business. We’re hoping to work with Scottish Enterprise to explore partnership opportunities and utilise PR opportunities to help us raise our profile as well as marketing support to assist in developing the offering and positioning us in the marketplace.”

The member businesses in Terrier Risk Partners are:

• Wildcat Applications, Edinburgh
• 3 Minutes to Midnight, Musselburgh, East Lothian