Author Archives: CDS Admin

EMPLOYEE OWNERSHIP IN THE CARE SECTOR

There are around 110 employee-owned companies operating, with approximately 7,500 employee-owners generating a combined turnover of around £950 million. In recent years, the model has proved particularly popular with businesses operating in the care sector. Clare Alexander, head of Co-operative Development Scotland, shares their stories and explores why they are drawn to employee ownership.
11/12/15 - 15112301 - SCOTTISH ENTERPRISE    GLASGOW    Claire Alexander

Employee ownership has consistently shown to improve staff engagement and wellbeing, which in the care sector, leads to better patient experience and outcomes. As owners, employees also 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.

These benefits are clearly demonstrated by Highland Home Carers, Stewartry Care, Paramount Care, Caledonia Social Care, and Aspire Housing and Personal Development Services.

Highland Home Carers (HHC) was founded in 1994 and became employee-owned in 2004.  Since then, the business has grown to become one of the largest independent providers of home care and support services in Scotland with over 500 staff.

The company aims to deliver the highest possible standards of care, enabling people in the Highlands to remain in their homes and in their local communities for as long as possible.  Moving into employee-ownership has ensured that HHC’s unique ethos was secure and provided a platform for growth.

Stewartry Care

Dumfries and Galloway-based Stewartry Care also became an employee owned company in 2004. Turnover increased by 16% in the first year and profitability by 39% and the company has continued to grow. Employees benefit from being informed on performance and having a say, with the opportunity to stand for election as a Director or Trustee of the company. The firm was awarded Care at Home Provider of the Year in the Scottish Care Awards 2018, with clients benefiting from a highly motivated care team.

Paramount Care, set up in 2000 by nurse Ruth Smyth who had a vision of a personalised care service that placed people at its heart, became employee-owned in 2017. It operates throughout Fife, Tayside, Perthshire and Clackmannanshire, delivering a range of services within people’s homes and within residential care homes for the public and private sectors.

Paramount was founded with the aim of providing a personal and approachable care service, where clients or employees wouldn’t have to call bases in locations like London or Birmingham whenever they had a query. Its aim was to provide a high quality of care with close and trusting relationships between carers and clients. Ruth felt that these qualities, which set Paramount apart from other care firms, could be compromised if it was bought over by one of them.

By selling it to an Employee Ownership Trust, Paramount Care continues to operate as an independent company rooted in the local area, run by people who care about it.

Caledonia Social Care, management and staff. L-R - Ross Wilson, Practice Team Leader; Carol Park, Administrator; Stuart Robertson, Regional Manager; Margaret Paterson, Managing Director; Derek Oliver, Regional Manager; Vicky Hoolihan, Corporate Services Administrator; Kenny Nicholson, HR Leader Taken 27-06-17

Caledonia Social Care

Caledonia Social Care (CSC) delivers care at home services throughout central Scotland and launched as an employee-owned enterprise on EO Day 2017 (30 June).

The launch of CSC represented 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. The firm benefits from high levels of colleague engagement, fair employment practices and lower staff turnover which helps lead to better outcomes for staff and service users.

The most recent care provider in Scotland to become employee-owned is Aspire Housing and Personal Development Services, which made the move in June 2019 with 186 social care employees becoming owners.

Staff at Aspire

Staff at Aspire

Aspire is passionate about empowering the individuals it supports to achieve a better life and a more self-directed and optimistic future, and employee ownership was an effective way to demonstrate this commitment to its employees as well. It enhances their opportunities to be more involved in contributing to the growth and development of the business, and allows them to equitably share the benefits from Aspire’s future successes.

In a sector where attracting and retaining the best people can have such a significant impact on performance, it’s easy to see why a business model which motivates, empowers and rewards them stands out. We look forward to more care providers recognising the benefits of the model and supporting them to become employee-owned in the future.

To learn more about EO and whether it could be right for your business, check out our resources page, listen to our podcast or get in touch with us here using the ‘expert support’ option.

ENGINEERING A SMOOTH TRANSFER TO EMPLOYEE OWNERSHIP

Precision engineering firm GS Brown, based in Fife, was established by 1974 by tool maker George Brown, who handed the reigns to his sons Des and Mike following his retirement. When the brothers were considering their own retirement, they wanted to ensure the company would continue to operate successfully and provide employment for its loyal staff, many of whom are local and long-serving. In May 2019, the firm became employee-owned, with 70% of its shares being held in an employee ownership trust.

We caught up with Des, who is Managing Director at GS brown, to hear more about their decision to sell the company to staff.

The GS Brown Precision Engineers Ltd team

The GS Brown Precision Engineers Ltd team

“As a family business with a well-established, close-knit team, it was really important for us to find a succession solution which was a good fit for us. Our priority was to enable GS Brown to continue operating without disruption, and to secure its future and the jobs of our staff. Around 70% of the firm’s workforce have had long service with it and the team includes families, with fathers and sons amongst the employees.

“If an external buyer had taken over the company, there would have been no guarantee of our manufacturing plant remaining here, where it was established, in the long-term.

“I first learned about employee ownership at a CEED (Centre for Engineering Education and Development) conference in the spring of 2018.  Realising that the model offered a great deal of potential and the opportunity to pass control of GS Brown over to those who know it best, I sought out further information.

“We were given initial support and guidance by Fife Enterprise, followed by in-depth insight from Co-operative Development Scotland and Ownership Associates, which enabled us to fully consider the merits of employee ownership and consult with our staff. The process was then initiated in November 2018. 

“We’re very pleased that the transition to employee ownership has all been relatively straightforward – the business has just carried on operating seamlessly.  GS Brown is now in a very strong position for the team to build on its success and reputation; we believe the company has a great future ahead and employee ownership is good news for everyone involved with it.

GS Brown’s transition to employee ownership was supported by Co-operative Development Scotland (CDS) and Ownership Associates. Legal services for the transfer were provided by Thorntons Solicitors whilst EQ Chartered Accountants provided financial services.

If you have a question or you want to talk about how employee ownership can help you, please get in touch with us here using the ‘expert support’ option.

FIVE COMMON EMPLOYEE OWNERSHIP MYTHS DISPELLED

Awareness of the many benefits of employee ownership continues to grow in Scotland, with uptake of the business model also increasing. However, there are a number of misconceptions around the model which can ultimately deter business owners considering employee ownership.

Here, Clare Alexander, Head of Co-operative Development Scotland, addresses five of the most common myths about employee ownership.

11/12/15 - 15112301 - SCOTTISH ENTERPRISE    GLASGOW    Claire Alexander

Claire Alexander

Myth 1: The process of becoming employee owned is a complex transaction

“While additional elements such as setting up a trust are required, an employee ownership transaction tends to be more collaborative than a standard business sale as everyone’s interests are aligned.  All parties want what is best for the business and its workforce, therefore less time and resources are spent resolving potential conflicts and the transaction is typically completed more efficiently.

“Furthermore, CDS offers a wealth of advice through its expert advisors, who can guide business owners through any perceived complexities throughout the employee ownership process.”

Myth 2: Employees cannot afford to make the investment

“Typically, when a business becomes employee owned, the majority of shares are bought on behalf of the employees by an Employee Ownership Trust. This is usually financed by contributions from the company itself, or a loan that is then paid back by the company. Employees don’t carry any personal liability for the debt assumed by the company in an employee buyout. Furthermore, when the trust pays out bonuses the first £3,600 is free from income tax, so is very tax efficient for employees.

“In some cases, employees also have the opportunity to invest their own money in company shares. However, this is a relatively small amount of the share capital, is usually voluntary, and will likely be undertaken using one of the HMRC recognised tax effective schemes.”

Myth 3: Employee ownership is only an option for retiring family business owners or entrepreneurs with no heir

“While this can be a common reason behind employee ownership, some owners may opt for the model despite having a suitable successor in order to reward the loyalty of staff and root the business in the local area. The seller may trigger an employee buyout a long time before they intend to withdraw from the company, remaining involved in the day to day running of the business for years before retiring.

“An increasing number of companies are choosing employee ownership as a means to attract, retain and reward staff”.

Myth 4: The vendor will have to sell their business at a lower price

“As they don’t have to negotiate with another business, the seller holds a great deal of control over the process. There is no reason that a carefully considered employee buy-out can’t deliver a fair price in line with the company’s market value. Indeed, when the tax advantages are considered, many sellers believe that they achieved a better deal when selling to an Employee Ownership Trust, than they would have achieved by pursuing a trade sale.

“With increasing number of businesses choosing employee ownership, specialist finance is now becoming available. Mainstream providers, like the banks, are also becoming more aware and supportive of the model.”

Myth 5: Employees will be more interested in keeping company profits for themselves than investing in the long-term health of the business

“Employees are well informed and understand the importance of investing in the businesses for the long-term. Decisions on bonus and share distributions are carefully considered in this context.

“Evidence shows that priority is given to investment in businesses’ long term success, for example in purchasing new equipment to improve efficiency while bonus and dividend payments being paid at a realistic level.”

To learn more about EO and whether it could be right for your business, check out our resources page, listen to our podcast or get in touch with us here using the ‘expert support’ option.

SHETLAND LIFE-SCIENCES CONSULTANCY BECOMES EMPLOYEE-OWNED

Shetland-based ESPL Regulatory Consulting (ESPL), is a unique business which provides specialist regulatory services to the life sciences and pharmaceutical / medical device industries. When a new medicine or a medical device is developed, the scientific data from laboratory studies and clinical trials needs to be reviewed, compiled and submitted to regulatory authorities around the world.  ESPL’s team of highly-experienced medical and regulatory professionals and scientists define strategies and complete these activities on behalf of its clients. One of the most experienced independent specialist consultancies in its field, it operates in throughout the UK, across the EU, and in North America and Australia.

In considering their long-term succession options, founders Helen, Tony, and Chris Erwood, were keen to identify a solution that would allow the business to continue to thrive and remain rooted in Scotland.  We caught up with Dr Helen Erwood to learn more about the company’s decision to sell to employees.

The ESPL Regulatory Consulting team at their Shetland location. Picture L-R: Holly Hunter, Diane Wood, Anna Watt, Helen Erwood, Tony Erwood.  Taken 29-03-2018.

The ESPL Regulatory Consulting team

It’s approaching time for control of the business to be handed over to the next generation.  We have built up a successful business from our Shetland base and we couldn’t have done that without the considerable talents and efforts of our team.  One of our core values is collaboration, and the employee ownership model reinforces that.

“It is enables control of the business to be passed onto the ESPL team who can protect the consultancy’s best interests and ensure the outstanding reputation it has earned within its specialist sectors will be maintained.

“We’re hugely thankful for the support we have received throughout the transfer, including the grant for legal costs provided by Highlands & Islands Enterprise, legal advice given by Blackadders LLP, and the assistance offered throughout the process by Ownership Associates.

“We are looking forward to the company’s continued growth under its new ownership model.”

If you have a question or you want to talk about how employee ownership can help you, please get in touch with us here using the ‘expert support’ option.

EMPLOYEE OWNERSHIP AND CO-OPERATIVES IN SCOTLAND – A TEN YEAR TRANSFORMATION

By Sarah Deas

11/12/15 - 15112301 - SCOTTISH ENTERPRISEGLASGOWSarah Deas

It is ten years since I took up my role as director at Co-operative Development Scotland. As someone who is passionate about creating a progressive economy – one that delivers for people and planet – it has been a real privilege to lead CDS over the past decade. As I prepare to move on, I’ve been reflecting on what we’ve achieved.

Initially on the edge of the economic development agenda, co-operative models have shifted firmly to the mainstream. Thousands of businesses and individuals have benefited from the 290 consortium co-operatives, community co-operatives and employee-owned businesses established in Scotland over the past ten years.  We have seen a fivefold increase in employee ownership since we started promoting the model and the pace of take-up is accelerating.

This growth has led to Scotland being viewed as a pioneer in co-operative development, with many aspiring to echo our approach. Over the years, I have been invited to speak at a range of international events and forums, including in the co-operative heartlands of Italy and Spain. A true recognition of our success.

In 2018, the Ownership Effect Inquiry, an independent review into employee ownership’s impact on the economy, recommended that the UK Government replicate “Scotland’s successful scheme that has delivered a tenfold return on investment for every £1 devoted to on-the-ground support.”

Some of Scotland's consortium co-operatives, community co-operatives and employee-owned businesses

Some of Scotland’s consortium co-operatives, community co-operatives and employee-owned businesses

There are a number of reasons behind Scotland’s success in this area. We’ve had exemplary support from the Scottish Government, which recognises the key role that co-operative models can play in delivering its economic goal of Inclusive Growth – a fairer economy which distributes wealth more widely and addresses inequalities.

An encouraging amount of cross party support has also led to increased dialogue around the models, with parliamentary debates on the importance of co-operatives and employee ownership to the Scottish economy. I have frequently been invited to contribute to meetings of the Economy, Jobs and Fair Work Committee (and its predecessors), where I’ve shared some of Scotland’s many success stories as evidence of the wider economic and societal benefits of co-operative working, bringing these to the forefront of the economic agenda.

The Scottish Government’s commitment to promoting co-operative models was further demonstrated with last year’s launch of ‘Scotland for EO’, an industry leadership group co-chaired by Jamie Hepburn, Minister for Business, Fair Work and Skills. Led by industry working in partnership with the public sector, it has a championing, influencing and facilitating role which aims to build and strengthen Scotland’s EO community. ‘Scotland for EO’ is built on the immense pride and passion displayed by Scotland’s employee owned businesses in endorsing the model over the years – hugely valued support which has been vital in effecting wider change.

29363444707_f6a5f261ca_o

The launch of Scotland for EO at the employee-owned Auchrannie resort in Arran last year

Also key to the surge in awareness of co-operatives is the work of a dedicated team here at CDS, whose commitment and approach to promoting the models has been instrumental to their growth. From raising awareness among professional advisors to providing businesses with advice and financial support, the team is passionate to drive momentum. With the ongoing support of our colleagues at Scottish Enterprise, Highlands and Islands Enterprise and Business Gateway, we have continued to attract increasing demand for our services, and as I move on, there is a strong pipeline of businesses looking to adopt co-operative models, particularly EO.

While progress has been significant, there remains work to be done to reinforce the benefits of co-operative models, and the route they offer to a more equal economy. As I hand over the reins to my successor Clare Alexander, I feel very positive that our activity over the past ten years has paved the way for continued change.

With a wealth of experience in driving better business through workplace innovation, Clare is ideally positioned to fully maximise the opportunities, and further drive the uptake of co-operative models in line with the Scottish Government’s Inclusive Growth Strategy. With her belief that “business leaders should be predisposed to see the power of their people”, her values are synonymous with those of ‘Scotland for EO’. Her position on the board will see her working towards the group’s ambitious goals of increasing the number of employee-owned businesses in Scotland to 500 by 2030, and by 2040 to have created the best environment for EO businesses to thrive with Scotland having the highest density of EO businesses in the economy as a consequence.

Meanwhile, I plan to continue to promote inclusive approaches through the Wellbeing Economy Alliance – a new global collaboration of organisations, movements and individuals working together to change the economic system to one that delivers human and ecological wellbeing. I look forward to building on what we’ve achieved over the past ten years and continuing to promote co-operative and employee ownership models as a way of achieving a fair and inclusive society.

EO GUIDANCE FROM PROFESSIONAL ADVISERS IS INVALUABLE

As the popularity of employee ownership among businesses in Scotland continues to grow, so does the requirement for specialist advice from professionals working in law, accounting and banking. To help raise awareness of the EO model among advisers in these sectors, we’ve been delivering a roadshow in partnership with the Law Society of Scotland and the Institute of Chartered Accountants of Scotland.

Our final events take place in Edinburgh and Glasgow on Thursday 6 June, with Campbell Clark, a partner at law firm Blackadders LLP, and Simon Poole of employee-owned Jerba Campervans on hand to share their knowledge and insight. We had a chat with them to learn more the aims of the roadshow.

The Jerba Campervans team

The Jerba Campervans team

Campbell says: “I’m delighted to be taking part in this event to help professional advisers in Edinburgh develop their awareness of employee ownership. Interest in employee ownership and its advantages as a business model has never been greater, so it’s essential for solicitors, accountants and financial consultants to ensure they’re fully equipped to inform and advise their clients appropriately and support them as they negotiate the transition process. An increase in availability of specialist guidance is something that the local business community will access and benefit from in the long-term.”

Simon, co-founder North Berwick-based Jerba Campervans which specialises in converting Volkswagen Transporter vans into luxury campervans, took the decision to sell the company to employees in January 2018. Since the ownership transfer, Simon and his wife Cath have continued to work in their usual roles at Jerba Campervans and are now sixteen months into their planned five-year exit strategy.

Simon says: “Our experience of transferring the ownership of our company has definitely convinced us of the advantages and it’s testament to the fact that employee ownership is an excellent business model which benefits everyone. Cath and I can continue with our day-to-day roles in the business for as long as we need to, with the knowledge that the future is taken care of, while our employees share in the profits of the business and have a much greater interest in its growth and success. We believe that this not only drives job satisfaction, productivity and innovation, it’s ensuring that the business’s unique ethos is preserved.

“We’d certainly urge any business considering succession strategies to explore employee ownership as a potential solution, and to seek out professional guidance on how to make the transfer process work to benefit both the business and its employees.”

The Selling a business to an Employee Ownership Trust roadshow is now over. To keep up with future events programmes, follow us on Twitter and LinkedIn, or contact us here using the ‘expert support’ option for more information.

GOOD FOR THE ECONOMY: PROFESSIONAL ADVISER EXPERTISE IN EO

Throughout May and June, we’ve partnered with the Law Society of Scotland and the Institute of Chartered Accountants of Scotland to bring professionals in the legal, accounting and banking sectors more information about advising their clients on employee ownership as a succession option. The Selling a business to an Employee Ownership Trust roadshow will see sessions delivered in eight locations throughout Scotland with presentations from some of Scotland’s leading specialists in business buyouts as well as representatives from employee-owned businesses.

The next stops on our EO roadshow for professional advisers in the legal, accounting and banking sectors are Inverness on Tuesday 28 May and Kirkwall and Lerwick on Wednesday 29 May.

Craig McKerracher of law firm Harper Macleod LLP will share his professional expertise and insight, while Dennis Overton and Rachel Hannah of employee-owned seafood producer Aquascot will be there to talk about the company’s EO journey.

aquascot

We caught up with Craig and Dennis to hear more about the important role professional advisers play in informing clients about employee ownership as a business succession model.

Dennis says: “Since we began our employee ownership journey in 2008, employee ownership has become the crucial element of Aquascot’s identity.  For us, it represented a way of keeping the business based where it should be at the heart of UK aquaculture and protecting the long-term interests of everyone involved with Aquascot – supply partners, partners in the business, customer partners and the many people who enjoy our products.

“We’re great advocates of the business model and would urge companies interested in adopting it to seek guidance from professional advisers and from businesses who’ve been through the process so they can achieve the best results in the interests of both the business and its employees. For example, one thing we found very valuable in preparing for employee ownership was forming an employee-elected Partnership Council. This gives everyone a fair chance to represent their colleagues, ensures a healthy flow of communication runs through the business and, we believe, also adds an additional strength to our partnership. We look forward to sharing more details of our experience at the sessions in Inverness, Kirkwall and Lerwick.”

Craig continues: “To thrive and fulfil their potential, it’s important that businesses – whatever their type or size – are able to access appropriate professional guidance, and that becomes particularly vital when a transfer of ownership is being considered. Professional advisers therefore need to ensure they’re well placed to offer their clients in-depth information and advice on all aspects of employee-ownership, and are equipped to capably and confidently lead them through the transition process.

“The forthcoming events for solicitors, accountants and financial consultants will help develop the expertise in employee ownership that’s available to the local business community, and in the longer-term, that’s good news for the region’s economy.”

The Selling a business to an Employee Ownership Trust roadshow is now over. To keep up with future events programmes, follow us on Twitter and LinkedIn, or contact us here using the ‘expert support’ option for more options.

WOMEN-LED EMPLOYEE-OWNED BUSINESSES LEAD THE WAY

Research carried out by Women’s Enterprise Scotland shows that women-led businesses contribute more than £5 billion towards the Scottish economy, and that if rates of women-led businesses equalled that of men, the contribution to Scotland’s GVA would increase to £13 billion. Therefore, it’s encouraging that the past few years have seen a rise in the number of female-fronted businesses in the employee ownership sector, with several of the businesses transitioning to EO being owned or run by women.

We caught up with our director Sarah Deas to hear about some examples.

“One of Scotland’s most prominent EO businesses being run by a woman is Arran’s award-winning Auchrannie Resort. Established by Iain and Linda Johnston in 1988, it became employee-owned in December 2017, with 160 members of staff becoming owners. Linda has led the company as managing director and board chair since 2010.

Auchrannie 1

The team at employee-owned Auchrannie in Arran

“With two 4-star hotels, 30 5-star self-catering lodges, two leisure clubs, three restaurants, an ASPA spa and Arran Adventure outdoor company, Linda and Iain had cultivated a hugely successful business. When considering her succession options, it was important to Linda that the ethos of the company, the existing team, and the community use of Auchrannie’s facilities for the future was protected.

“Those were the drivers in deciding that employee ownership was the way forward for the company, and the new ownership structure means that her team now plays a huge part in shaping and influencing the future success of Auchrannie.

“Another Scottish business which has adopted the EO model in recent years is Doune-based Harvey Maps, a professional mapmaking service for the sport of orienteering. Founded 40 years ago by Robin Harvey MBE and Susan Harvey MBE, it is one of a very small number of companies in the UK to generate its own map data, becoming a market leader in maps for outdoor pursuits.

“As Susan considered her exit strategy, she felt it was important that the business they had built up over the years wasn’t swallowed up by a competitor. She decided that EO would give the company the best chance of continued independent existence and success, while retaining jobs locally. The employee buyout saw ten staff given the opportunity to become owners.

Harvey Maps, Doune, Stirlingshire, 21/11/2017: Harvey Maps staff, with founding directors Robin and Susan Harvey (centre), pictured outside their firm's offices (white building, left) on Doune's Main Street, Stirlingshire.

The team at Harvey Maps, Doune

“Heading up Glasgow-based architects Page \ Park is Karen Pickering, who was appointed as its chair of the board of directors following its transition to employee ownership. Having served 27 years with the company, her energy and drive to ensure the best possible architectural outcomes has continued in her new leadership.

“She states that becoming employee-owned boosted productivity and increased engagement among staff – team members are no longer ’wage earners’, they are ‘company owners’ and that has brought about greater energy, drive and pride – a great endorsement of the employee ownership model.

Page  Park Architects, Glasgow, 02/12/2013: Page  Park Architects staff, pictured at the firm's offices in James Morrison Street, Glasgow. Photography for Cooperative Development Scotland / Scottish Enterprise from:  Colin Hattersley Photography - colinhattersley@btinternet.com - www.colinhattersley.com - 07974 957 388

Page\Park Architects in Glasgow

“Also benefiting from EO is East Kilbride-based brand-realisation company Novograf. When the founders were considering their succession options, the company was performing well, winning some significant new business. They wanted to ensure this momentum would continue with those who knew the company best.

“Heading up the team of employee owners is managing director Jennifer Riddell–Dillet, who is harnessing the power of a highly engaged and motivated workforce to drive the business forward to further innovation and success.

Novograf in East Kilbride

Novograf in East Kilbride

“Employee ownership has great potential to help drive economic growth and create greater wealth equality in society. It’s great to see such successful, female–led businesses thrive within the sector, and we look forward to the number of women leading the way in EO continuing to grow.

If you have a question or you want to talk about how employee ownership can help you, please get in touch with us here using the ‘expert support’ option.

CHEMCO INTERNATIONAL BECOMES EMPLOYEE OWNED TO ADDRESS SUCCESSION AND SAFEGUARD SKILLS AND JOBS

Chemco International is the latest company in Scotland to become 100% employee owned.

The company, which is headquartered in Coatbridge, is regarded as a market leader in the design and manufacture of state-of-the-art protective coatings and is at the forefront of delivering environmentally friendly products for a wide range of industries throughout the world.

Chemco International

The Chemco International Team

Founded in 1990 by Manny Khorasani, Chemco traces its origins back to the Original Glassflake Company, the inventors of glassflake technology in the 1960s. Manny joined Glassflake as a production supervisor in 1982 and after quickly rising through the management ranks, he bought the company in 1990, renaming it Chemco International. The company is now one of a few remaining Coatbridge-based engineering firms that has continued to evolve, expand and develop over the past 40 years.

Around eighteen months ago Manny started to think about taking a back seat in the business and, after considering his options, he decided that employee ownership was the best way to secure the company’s future and protect and retain the jobs of his staff. In December, Chemco International announced it had completed its transition to become an employee-owned business, with 24 members of staff becoming owners.

An Employee Ownership Trust was formed to hold 100% of the shares on behalf of the new owners.  We caught up with Manny to hear more about the reasons behind the decision to move to employee ownership.

“We are almost an institution in the area, having been here for almost 40 years. That’s why it was really important to me that the company not only stayed within the local community, but that the jobs and the skills of the staff, who all live locally, were retained and protected. 

“I looked at a number of different options, including selling the business, but my concern was that due to the nature of the business, a trade buyer would most likely relocate the company. None of the options I explored delivered the business continuity I wanted for our customers and employees and this is when the employee ownership became an attractive option. 

“I carried out some research and then attended an employee ownership event run by Scottish Enterprise. The event was really useful and I came away with lots of valuable information. Even before I left the event I knew that employee ownership was exactly what I was looking for – it would provide the security that we wanted and, most importantly, would allow the employees, who have all played a key role in the growth of Chemco International, to have a real say in its future. 

“I must also mention Scottish Enterprise, for being instrumental in facilitating the employee ownership scheme for Chemco, and giving impartial, independent trustworthy advice. 

“It’s a very exciting time for our company and we all look forward to the opportunities this brings.

As far as I am concerned employee ownership is a win, win situation for all concerned and it is my belief that this will be the way forward in the near future.”

For more information about employee ownership and whether it is right for your business, please get in touch here using the ‘expert support’ option.

 

THE PRIORY HOTEL BECOMES EMPLOYEE OWNED

Founded in 1972 by Stuart Hutton, The Priory Hotel in Beauly is a local institution, holding a special place in the hearts of many from the town and beyond. Over the years, Stuart and his family have played a key role in the day-to-day management and running of the hotel. However, after over forty years of business, he began to consider his retirement and what that might mean for the hotel. After considering his options, Stuart concluded that employee ownership was the best way to secure the hotel’s future and reward his loyal staff.

An Employee Ownership Trust has been formed which will hold 72% of the shares on behalf of the employees. Stuart’s son Kenneth Hutton will retain the bulk of the remaining shareholding, to demonstrate that the family remains committed to the continuation of the hotel. Kenneth grew up with the hotel since childhood, and despite taking a different career direction as a golf professional, he has become involved again over the past few years. He will become managing director of the company, and will oversee its operation as his dad begins to remove himself from the business.  We caught up with Kenneth to hear more about the reasons behind the decision.

The Priory Hotel, Beauly, Thursday 22, November, 2018. Image: Assembled staff

The Priory Hotel team 

“My dad was at the stage where he was considering a step back from the business. He had put the hotel on the market recently and had a couple of trade sale offers, however he didn’t feel that the prospective buyers were the right fit for the hotel. A staff member had once mentioned employee ownership as a potential solution to this – it meant the business would be sold to those who know it best, and it wouldn’t be taken over by a large chain. The option stuck with my dad and when he felt like he had the correct management team in place, the time was right to begin progressing the buyout.

“Beauly is a small town and many people from the area have worked at the hotel over the years. Many marriages were forged at our discos and musical events in the 70’s and 80’s, and people still travel from far and wide for our food offerings, and in particular our famous Sunday carvery and traditional High Teas. The Priory Hotel is a huge part of the local community and a takeover by a large chain could have put jobs and company values at risk. By selling to his employees, my dad knows that the business he spent 46 years building is now in the hands of a loyal and invested team that wants the best for the hotel and the local area.

“Some of the key management team will assume positions on the board, including Kate Melens, who will be the General Manager of the hotel, bringing a wealth of experience and a fresh view to the way the business needs to develop with changing times. The staff are very excited by the news and are looking forward to learning more about the role they will play in the hotel’s future.”

For more information about employee ownership and whether it is right for your business, please get in touch here using the ‘expert support’ option.