Employees of Glasgow-based Mediascape were delighted to hear that they are to become the owners of the company in a move which sees the majority of the shareholding transfer into an Employee Ownership Trust.  Angus and Shona Knight, owners of Mediascape, announced their plans at a meeting of all employees. The couple had considered a number of options and rejected several approaches to buy the company.

Mediascape designs, supplies, installs and maintains audio-visual and videoconferencing systems working with an impressive client list that includes the University of Glasgow, Strathclyde University, St. Andrews University, Historic Scotland and the National Trust for Scotland as well as many prestigious private and public sector clients. The company was set up in December 2003 and started trading in January 2004 with four members of staff. Turnover for this year is likely to be in excess of £5m, the company’s best trading year yet. There are now 24 employees.

We spoke to the team about their experience of transitioning to employee ownership.

The Mediascape team with founders Angus and Shona Knight at the front.

Shona said:  “Too often a company is sold and before long, it disappears and the jobs go.  We couldn’t do that. We have a very talented team of people at Mediascape who have shown such loyalty to Angus and I over the years.  It was time for us to recognise that loyalty.”

Angus commented: “One of the attractions of choosing this path is that there will be continuity for Mediascape customers and staff. Shona and I plan to stay on for the next few years to ensure a smooth handover and allow the management team time to get to grips with running the business.  We’re retaining a 20% stake in the business to demonstrate our commitment to the staff that we’re still part of the show.”

Lee Ferrie, one of the first employees of Mediascape and now engineering manager, added:  “Mediascape is a great company to work for. I guess we were all a bit concerned about what would happen when Angus and Shona decided it was time to move on. Now, our future is in our hands and it’s our job to continue the company’s success. It’s an exciting opportunity and we’re all up for the challenge.”

North Berwick-based Jerba Campervans specialises in converting Volkswagen Transporter vans into luxury campervans.  Founded in 2006 by husband and wife team Simon Poole and Catherine Brookes, the company carries out internal layout conversions on the iconic brand’s VW Transporter T6 model, offering six standard configurations to meet a range of different needs. Having spent long periods of time travelling in a VW camper, both as a couple and later as a family of five, Simon and Catherine use their experience to identify optimum layouts and features, working with a highly-skilled team to make their designs a reality.

In January this year, Jerba announced it had completed its transition to become an employee-owned business, with 15 members of staff becoming owners.  An Employee Ownership Trust has been formed and holds 100% of the shares on behalf of the employees.

Jerba is one of the few official Volkswagen registered vehicle body builders for the Transporter T6, demonstrating diligent compliance with a wide range of key areas. By transferring their shares to an Employee Ownership Trust, Simon and Catherine have also helped to ensure that the requirement for this specialist knowledge and skillset is anchored in the local area. 

We spoke to Simon to find out more. 

The Jerba Campervans team

“The matter of succession had originally been in the back of our minds as something we would need to properly consider in around five years’ time, however, when we started exploring employee ownership as a potential solution, we were so sold on the benefits that we decided to make the transition sooner rather than later.

“Employee ownership is an excellent business model which benefits everyone. Catherine 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 are given a stake in the business and a say in how it is run. Not only do we envisage this driving job satisfaction, productivity and innovation, it ensures that the business’ unique ethos is preserved.

“We established Jerba following a decade of owning and hiring campervans all over the world and finding that the layout could be significantly improved to suit our specific needs. Our success lies in our extensive first-hand experience, insights from which have been passed on to our team. We felt that this intimate approach and the niche upon which the business was founded could be lost if Jerba was sold to another business.

“Protecting jobs was also an extremely important factor in our decision. Many employees have been with us for between five and ten years and have played a vital role in the growth and success of Jerba Campervans. Moving into employee ownership gives job certainty to everyone who works here and enables them to have proper control of their future.  The staff are very excited about the opportunities it will bring for the future growth of the business.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

Graeme Nuttall OBE, partner at law firm Fieldfisher and author of the influential Nuttall Review of Employee Ownership, is the UK’s leading legal expert in employee ownership. 

We spoke to Graeme to find out why Scotland is ahead of the rest of the UK in encouraging employee ownership. 

Selling a business to employees used to be a rare event. Now every month we hear of another company or companies becoming employee-owned.  Recently, Scotland has seen the Auchrannie Hotel in Arran, North Berwick campervan conversion specialist Jerba Campervans, audiovisual company Mediascape in Glasgow and Perth-based engineering firm Merlin ERD all become employee-owned.  But why this surge in interest amongst Scottish businesses?

I am a partner with European law firm Fieldfisher. In 2012 I took on a part-time voluntary role as the UK Government’s independent adviser on employee ownership. I produced the Nuttall Review of Employee Ownership, which articulated the benefits of employee ownership and identified what was required to deliver more employee-owned firms in the economy, ultimately paving the way for the Employee Ownership Trust (EOT). Legislation introduced in 2014 brought in tax benefits for business owners selling to an EOT and also to employees within EOT owned companies.

Since then, employee ownership in the UK has continued to grow, particularly in Scotland, where I recently met with the Scottish EO adviser community to share insights on the notable growth of the model’s popularity In Scotland.

The Nuttall Review definition is that employee ownership exists when employees are able to participate through a meaningful and significant stake in their business, and this ownership stake is underpinned by organisational structures that ensure employee engagement. A feature of many employee-owned organisations is an element of trust ownership of shares.  The EOT is designed to hold shares long term on behalf of all employees. The main benefits of trust ownership are that employees of the business know that the shares in the trust are held on a permanent basis on their behalf; and have a collective voice, through the trustee of that trust, in how the company is owned and governed.

If a business owner sells a controlling interest in the company to an EOT, the sale proceeds can be completely exempt from capital gains tax, subject to certain conditions being met.  Employees in firms with majority EOT ownership can benefit from an annual income tax free bonus up to a threshold of £3,600.

The introduction of these tax incentives was obviously a game changer.  No-one goes into employee ownership just to take advantage of tax breaks. What the EOT legislation did is recognise the benefits employee ownership brings to the economy and get these more widely known.

It is estimated there are currently at least 300 employee-owned firms in the UK and almost one third of these are Scottish based firms. These firms come from diverse sectors; professional services, health and social care, manufacturing and construction.  Employee ownership can be found in all business sectors; indeed, it is now difficult to identify sectors where there are no examples of employee-owned companies.

Clockwise from top left – Auchrannie, Jerba Campervans, Mediascape and Merlin ERD have recently joined Scotland’s growing number of EO businesses

But why is uptake in Scotland is significantly higher than the rest of the UK?

I believe it comes down to two factors. The Nuttall Review identified two key obstacles to the wider adoption of employee ownership: lack of awareness and lack of practical support. Co-operative Development Scotland has undertaken some sterling work with advisers, evidenced by the amount of interest shown at its January 2018 seminar. The expert help provided by Co-operative Development Scotland goes a long way to support businesses, and importantly the employees, through the process.

And will the number of employee-owned firms continue to increase at the current rate? I would go further than that. I believe we’ll see an acceleration in the growth of employee ownership.  The Scottish experience shows how this can happen.

Located in Brodick on the Isle of Arran, Auchrannie is an award-winning resort comprising two 4-star hotels, thirty 5-star self-catering lodges, two leisure clubs, three individually branded restaurants, a children’s Playbarn, an ASPA spa and Arran Adventure outdoor company.  It was established by Iain and Linda Johnston in 1988, with Linda heading up the company as managing director and board chair since 2010. The resort has an annual turnover of £6.7million. 

Earlier this year Auchrannie announced it had completed its transition to become an employee-owned business, with 160 members of staff becoming owners. An Employee Ownership Trust was formed and holds 100% of the shares on behalf of the employees.  The deal was structured in order to make it affordable to the business without affecting its ability to reward the team and reinvest for the future.  It marks the first time a hotel or resort in Scotland has become employee-owned.

We spoke to Linda to hear more about the decision to become employee-owned. 

“The team were involved in the process from an early stage and were given the opportunity to input throughout.  They have very much embraced the concept of employee ownership and are extremely excited about it.  They are delighted that Auchrannie’s legacy will be protected and that they have the chance to play an active part in, and benefit from, Auchrannie’s future success.  They also realise that what each of them does will affect the future success of the business and that this is directly linked to their own success, so they have already become more engaged in making the business better and understand the power and influence each and every one of them now has on their own future.  There is no, ‘them and us’ now, we’re all in this together.

“The transition has been pretty smooth despite the fact that Auchrannie is a complex business; we have been well supported by HIE, CDS, Co-ownership Solutions and Burness Paull.  The help we received was invaluable in enabling us to put together the team who lead us through the whole process seamlessly.  Although there have been a number of hurdles to jump over, there have been no real lows.

“By transferring the shares to an Employee Ownership Trust, myself and the ex-shareholders have also protected Auchrannie’s contribution to Arran.  It is very much part of the community and provides essential wet weather facilities, other amenities and support to the island’s residents and its visitors.  The change to employee ownership means that we, along with the community of Arran, can relax knowing that it will always remain an independent, locally run organisation with community values at heart.

“Employee ownership will give the whole Auchrannie team a stake in the continued growth of the business.  All of us will work together to build a more efficient, sustainable and profitable business.  We are all excited to continue on our journey in which we strive to lead the way in Scottish tourism and create amazing experiences for our guests and an awesome place to work for our team.”

Auchrannie’s transition to employee ownership was supported by Highlands and Islands Enterprise (HIE) and Co-operative Development Scotland (CDS), with the process managed by Co-ownership Solutions LLP and legal services by Burness Paull LLP.

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

Founded 40 years ago by Robin Harvey MBE and Susan Harvey MBE to provide a professional mapmaking service for the sport of orienteering, Doune-based Harvey Maps 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 such as hill walking and mountain marathons.

Harvey Maps founding directors Robin and Susan Harvey.

It also recently joined the growing number of businesses in Scotland to adopt the employee ownership model, with ten staff given the opportunity to become owners. An Employee Ownership Trust has been formed and will hold 90% of the shares on behalf of the employees. Susan Harvey is the only other shareholder with 10% ownership.

We caught up with Susan to hear more about the firm’s decision to become employee-owned.  

“In due course we will want to retire. However, having formed and developed the business into a market leading company over the past 40 years, we didn’t want to sell to a competitor and see our life’s work absorbed into another company.  It was also important to us to retain the jobs in Doune.

“We wanted a succession solution which gave the company, the jobs and the brand a good chance of continued independent existence following our retirement; employee ownership ticked all of our boxes.

“The whole process has been a leap into the unknown and we could not have done it without support.  We spent quite a bit of time working with specialist advisors from Scottish Enterprise and Co-operative Development Scotland, undertaking briefings with the staff to help them understand the concept of employee ownership.

“It was an extremely busy and challenging time for the business, with the transition to employee ownership, our 40^th anniversary and during the busy festive promotions season. However, the future is bright and the involvement of all employees in the ownership of the business will be a major boost going forward. I am confident that once things settle down, employee ownership will be great for the staff, the brand and the company.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

Harvey Maps staff, with founding directors Robin and Susan Harvey, centre

Perth-based engineering experts Merlin ERD has become the latest business to join the growing number of employee-owned firms in Scotland.

Merlin, which is celebrating its tenth anniversary in Perth, has become world leader in the design and delivery of horizontal, extended reach (ERD) and complex oil and gas wells.  The company has delivered more than 200 projects in 40 countries, all from its Perth office.

We caught up with Merlin’s founder, Iain Hutchison, to find out more about the decision to transition his business to employee ownership.

“When I first began to investigate succession options, I didn’t believe employee ownership (EO) was right for Merlin.  However, after attending a Scottish Enterprise EO session and looking at the detail, I discovered that the benefits of EO were closely aligned with our values. EO offered a succession path that increased business resilience, retained our culture and provided an ideal combination of an eventual exit for me along with advantages for our loyal staff.  I really didn’t want to see what we had built here in Scotland being moved, or worse, closed by a competitor allowing them to flourish elsewhere at the expense of our local team.  By becoming employee-owned, we’re anchoring highly- skilled jobs and a profitable high-tech business in Perth, Scotland.

Merlin ERD received its second Queen’s Award for Enterprise for International Trade in September 2016.

“Just as importantly, I want to see the business continue to grow; employee ownership has consistently proven itself to be an excellent mechanism for growth, with a more motivated and engaged workforce helping to drive innovation, ambition and turnover.

“We’ve enjoyed huge success here at Merlin ERD, expanding into overseas markets and being awarded two prestigious Queen’s Awards for Enterprise for International Trade, whilst weathering the oil and gas industry downturn.  It is my belief that our transition to employee ownership will assist in propelling the business through the next stage of growth, whilst providing exceptional opportunities for our employees who will stand to share in future profits of the business. If past performance is any guide to the future, Merlin is going to impress.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

By Sarah Deas

I’ve always wanted to visit Mondragon, the world’s largest worker co-operative. So, I was delighted when the opportunity arose on my recent visit to the Basque Country.

Mondragon is the largest business group in the Basque Country. The co-operative was established in 1956 and now consists of 102 autonomous co-operatives, 140 subsidiaries around the world and 26 foundations / umbrella organisations. The group employs 73,655 workers across 268 business units.

Mondragon University, surrounded by some of the group’s factories

Whilst this sounds a large number, it represents a relatively small percentage of the 2,900 co-operatives and employee owned businesses in the Basque Country.  The significance lies in the number of industrial co-operatives within the group (68 in total) of which some are very large (employing more than 2000). Also, the breadth of the group is significant including credit, consumer, education and research & development businesses.

I met with Ander Etxeberria, director of Dissemination. To kick off our meeting he shared this video which provides an excellent introduction to the group. I won’t try and summarise its content… just recommend you watch it to learn more!

The inspiration and driving force behind Mondragon was a priest, Jose Maria Arizmendiarrieta. Recognising the economic hardships and social division that followed the world wars, he set out to change society for the better.

Ander Etxeberria, director of dissemination at Mondragon, with CDS Director Sarah Deas

Jose believed in the dignity of the human being, the importance of solidarity and the value of education and work. His business was founded on the principles of co-operation, participation, innovation and social responsibility, values that are as relevant today as they were in the 1950s.

He didn’t set out to become a businessman, instead recruiting others to lead the growth of the co-operative. His focus throughout his life remained on the ethos of the business and working to improve society. Reflecting on my visit, that was a key insight for me.

I wondered what Jose’s advice would be to us in Scotland as we aspire to ‘inclusive growth’ that ‘combines increased prosperity with greater equality, creates opportunities for all, and distributes the benefits of increased prosperity fairly’?

I think he’d be pointing us to reflect on our values and consider models that empower and reward a key resource (human capital) and share the dividends of enterprise more widely across society.  In fact, I was struck by the similarity in ethos to that of some owners considering succession options. Increasingly they are looking for a solution that allows them to leave a legacy… which employee ownership achieves.

If we need proof that it works… the Basque Country now has the lowest level of unemployment and inequality in Spain. Given the scale of worker ownership in the region this is a clear indication of the impact of an inclusive business model.

By Sarah Deas

Recently I was invited by the Provincial Council of Gipuzkoa to share Scotland’s success in promoting employee ownership as a succession solution with business leaders in their region. This was quite an honour given this region of the Basque Country is home to Mondragon, the world’s largest worker co-operative.

So, why is the Basque Country interested in learning from Scotland? The answer lies in the fact that Gipuzkoa is facing similar economic issues to other developed world regions; ‘babyboom’ business owners are looking to retire – it is anticipated that a third of owners will be seeking exit solutions in the next 10-15 years.  There’s a desire to find solutions that will ensure the businesses’ continuity, maintain decision centres in the region, retain talent within organisations and motivate/reward workers.

Building upon a history of worker participation through worker co-operatives, the region is keen to promote a model that both addresses these challenges and aligns with their culture and values. Employee ownership offers that solution.

As keynote speaker at an event in San Sebastian, the capital city, I presented the economic development rationale for Scotland promoting employee ownership as a succession solution (very much mirroring that of Gipuzkoa) and shared success stories, including Aquascot and Page\Park.

The audience then heard from three local businesses that had chosen employee ownership as a succession solution; Exide (150 employee engineering business); Industrias Ormola (40 employee manufacturer of plastic, aluminium, and brass moulds for foundries); and Tarte Coop (28 employee provider of heating and air-conditioning systems).

I was struck by the similarity of each of their stories to those of Scottish businesses that have transitioned to the model. There was a strong ethos underlying each owner’s decision… a desire to see it continue in its current form, to sustain local employment and to do the best by those who had made the business a success. Also, recognition that employee ownership would drive performance and position the business well for a bright future.

A lively discussion session followed, covering many aspects of the model.  In wrapping up a question was asked as to the panel’s thoughts on the most difficult aspect of a transition. This stimulated a discussion on the difference between ownership and management. Whilst it was acknowledged that the culture in an employee-owned business will be more transparent and participative, the panel stressed the importance of clearly defining roles and responsibilities.  A valuable learning point.

The Provincial Council of Gipuzkoa has devolved tax raising powers which it uses to incentivise take-up of the employee ownership model. Whilst there are differences in approach, there was real interest to learn from the UK’s 2014 legislation that enables vendors selling a majority stake to an employee ownership trust to gain exemptions from capital gains tax and for bonuses paid out by the trust to be exempt from income tax.

Whilst the Gipuzkoa Province is seeking to actively promote the model, it already has a well-established employee ownership sector: 245* businesses employing 3,253 people (equating to 37% and 49% of employee owned companies and employees in the Basque Country respectively). So, I really did feel honoured to share Scotland’s aspiration and early success in building a strong employee ownership sector.  We have much to learn from my hosts and I look forward to continuing to share experiences.

*figures exclude co-operatives

Our client Argyll and the Isles Tourism Cooperative (AITC) was recently shortlisted for a major global award following the success of its highly effective “Wild about Argyll” campaign, which saw Scottish endurance cyclist Mark Beaumont embark on an ambitious 12-day journey across the region, participating in extreme sports and completing an array of challenges.

The campaign was named a finalist in the Place Brand of the Year category at the City Nation Place Awards 2017, which recognised destinations that have excelled at attracting tourism, driving economic development and engaging citizens. While Copenhagen walked away with the prize at the global conference in London, the inclusion of Argyll and the Isles on the shortlist alongside major destinations throughout the world marks a significant achievement for the consortium. We caught up with AITC chair Calum Ross (above) to learn more about the campaign and how collaborating to raise awareness has been key to driving growth of the area’s profile.

“A consortium comprising 11 organisations from across the west of Scotland, AITC was established to enhance the area’s marketing power by way of pooling resources. By highlighting the unique selling points of each individual area within the region and combining them under one umbrella brand, we had a stronger voice to promote our offering and raise awareness of the amazing experiences on offer in Argyll and the Isles. We also worked together to source external grant funding of more than £800,000 over the last 5 years, which enabled us to develop both our capacity locally and our domestic and global marketing strategy.

“The Wild About Argyll brand was originally conceived as a way to appeal to the adventure seeker, a much younger market on our doorstep in the Central Belt of Scotland. However with the involvement of Mark Beaumont, who captures the very soul of our region, the campaign has attracted global attention and reached an audience of millions – success which has led us to adopt Wild About Argyll as a general brand for the Argyll and the Isles region.

“Over a hundred of our local businesses supported the campaign at the outset, a remarkable demonstration of the tremendous spirit of collaboration we have in Argyll. The international recognition of the campaign is not just a huge accomplishment for the area, but a real testament to the effectiveness of collaboration, which is central to the campaign’s success.

“Wild About Argyll was borne out of innovative and ambitious thinking, and delivered on a scale which would not have been possible for any of the members to implement individually. The success of the campaign is an extension of the success we have already achieved through collaborative working, which includes new trips to the area being offered by national and international tour operators we have worked with at VisitScotland’s annual EXPO events. We are now developing an exciting partnership with Glasgow Life, Scotrail and Calmac for 2018 promoting the cultural wonders of the city and the micro adventures in Argyll.

“We are thrilled to have created something that has captured the attention of so many and gained such wide-reaching recognition for our beautiful region, and we look forward to continuing to work collaboratively and innovatively to further grow the profile of Argyll and the Isles and attract more adventure seekers from home and abroad.”

For more information about how collaboration could benefit your business, get in touch to arrange a chat with one of our expert advisors.

Pictures courtesy of Morrocco Media, Kieran J Duncan and Finalcrux Films. 

Leading aerospace engineering company STAR-Dundee is one of the latest businesses in Scotland to join the growing number of employee-owned firms in Scotland.

The company, which spun out from the University of Dundee in 2002, designs electronic components and test equipment for spacecraft, supplying it to international space agencies. We caught up with founder Professor Steve Parkes to find out more about STAR-Dundee’s growth and the decision to become employee-owned.

STAR-Dundee founder Steve Parkes

“Originating because several organisations wanted to use technology we were developing at the University of Dundee, STAR-Dundee has grown from an academic and a few enthusiastic research students designing and developing products in their spare time to an employer of 25 people with offices in both Dundee and Barcelona.

“Having formed STAR-Dundee and forged it over 15 years into a company with a worldwide reputation, I realised that I was not going to be around to see it through the next 15 years. It became clear that the future of the company was about the people that had helped make it a success and the culture that we had developed to support that success. Selling the company to another organisation, which would inevitably change the culture and might even move it from its Dundee base, was not a very attractive idea.

“Assisted by a succession planning project initiative by Scottish Enterprise, I reached the decision that employee ownership was the way forward for STAR-Dundee. Employee ownership retains and strengthens the culture and will ensure that the company always has a base in Dundee.

The STAR-Dundee team

“The management team has been restructured to provide a firm foundation for further growth, and we’ll soon be launching a new technology, SpaceFibre, which we’ve spent the last ten years developing. Although designed primarily for spacecraft applications, it is creating interest in other areas including the robotics and medical equipment industries.

“STAR-Dundee has been a great success because of its people, and ultimately, our move to employee ownership allows these individuals to have a greater say in the running of the company and to further benefit from the success which they are instrumental in creating.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

When it comes to exporting, smaller businesses can face barriers that are less challenging for larger, established organisations. Lack of experience, legislative difficulties in other countries, and inadequate resources to manage shipping and logistics matters are just some of the challenges they come up against.

Next month, Scottish Enterprise will host ScotExport 2017, an event aimed at helping businesses build their export capabilities, featuring a packed programme of talks and workshops. Co-operative Development Scotland will be joining the Delegate Hub to talk about how collaboration can help businesses overcome some of these challenges, aiding access to international markets. Ahead of the event, to find out more about the importance of exporting and the role collaboration can play, we spoke with Karen McLeod, who manages the export advisory service at Scottish Enterprise.

Why is exporting important?
“Overseas markets have become increasingly important to the Scottish economy and in 2015 Scotland’s international exports were valued at £28.7 billion*, a 3.6% increase from 2014.

Our research shows that many overseas markets are underserved and there is demand for Scottish products and services internationally. This, paired with the fact that SE supported 2,500 businesses to export last year shows that there is opportunity and the ambition for exporting to continue to grow.”

What are the benefits?
“Trading abroad can boost your profile, credibility and bottom line.  That applies whether you’re trading with established markets such as the EU and USA, or high-growth markets like Brazil, China, India, Colombia and Vietnam.

“International markets like these offer you access to new customers, revenue and ideas. Crucially, they enable you to spread your business risk, increase the commercial lifespan of your products and services and secure economies of scale which are not always possible at home. In fact, exporting is now considered essential for Scottish businesses that want to safeguard future growth. 

“The figures are compelling, showing that those firms that choose to export become 34% more productive in their first year** while those already exporting achieve 59% faster productivity growth than non-exporters**, positively impacting on staffing and financial performance.

“Doing business overseas brings further benefits such as fostering ideas for new products and services. Once a company has ‘dipped their toe’ into a new market this in turn tends to increase confidence and ambition and provides the momentum for further growth through exporting.”

What are the barriers and how can you overcome them?
“Exporting can seem daunting to smaller businesses and the thought of going it alone can often be off putting and seen as high risk.  Collaborating with others can be a way to address those risks and make the most of the opportunities that exporting brings.”

How can collaboration help businesses access international markets?
“Businesses can collaborate using the consortium co-operative business model. This model allows businesses to come together for a shared purpose; to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts. Collaborative activity can include the creation of a portfolio brand for export, consolidated shipping and joint e-commerce activity.

“A good example of businesses successfully adopting this approach is recent Collaboration Prize winner Made in Scotland: Collaborative Export Solutions, a collaboration of eleven companies involved in the luxury food and drink sector. Selling a range of products including salmon, cheese, gin and whisky, the member businesses pool together their resources and experience to extend their offering to the lucrative overseas market. Among the members is an e-commerce and logistics firm, giving valuable insight into this aspect of exporting.”

Made In Scotland: Collaborative Export Solutions team members

Event information
To find out more about exporting from Scotland, join us at ScotExport 2017, taking place on 31^st October at the DoubleTree by Hilton Hotel Glasgow Central. You can get more information about the programme and book your place here.

For more information about the support available to help you collaborate and access international markets please visit www.scottish-enterprise.com/collaboration.

*http://www.gov.scot/Topics/Statistics/Browse/Economy/Exports/ESSPublication
**UK Government UK Trade & Investment research publication – Bringing home the benefits: how to grow through exporting

Co-operative Development Scotland (CDS) director Sarah Deas discusses the potential of employee ownership in driving an entrepreneurial and innovative culture within businesses.

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.

What are the reasons behind the rising popularity in an EO structure?  Aside from being a popular succession option, evidence shows it also drives an entrepreneurial and innovation orientated culture within a business.

Bright Ascension, experts in space technology, recently became employee owned in order to help meet plans for growth and to continue developing and creating innovative products. The Dundee and Edinburgh based business specialises in software products and services for satellites.

In order to build a world class business the directors recognised that they needed to attract, retain, motivate and harness the best talent in the field.  Their main priorities were to scale up the business by attracting investment and then fully engage employees to drive performance within the business.  These goals have been achieved through employee ownership.

Bright Ascension founder director Peter Mendham and technical director / software engineer Mark McCram.

Similarly 4C Design, Hunter Adams and Accord Energy Solutions have all chosen the model to drive an entrepreneurial and innovation orientated culture. By having a stake in the business, employees have a vested interest in increasing productivity and driving innovation.  This sense of ownership leads to employees being more willing to contribute ideas, from developing new products to identifying new markets.

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. Recognising the benefits of the model, the Government recently introduced tax incentives to increase its adoption.

I’m anticipating that in the years ahead employee ownership will increasingly be adopted as a way to recruit, retain and reward employees, enabling business growth and higher levels of performance.

Through Co-operative Development Scotland we provide free support to businesses considering employee ownership, offering specialist advice and support to help them adopt the model.

For more information on the services provided by CDS, click here.

For family businesses, planning for succession is one of the biggest and most critical challenges they will face. However, it can also be a great opportunity to maximise opportunities and implement a structure that will allow the business to continue trading whilst staying true to its original values and ethos for generations to come.

Co-operative Development Scotland director Sarah Deas discusses some of the issues family businesses need to consider when looking at their succession options, and why employee ownership can sometimes be the most effective exit strategy for family businesses that want to remain rooted in their local community.

“In a family firm, the first choice is almost always to sell to family. However, that’s not always an option if the next generation has chosen a different career. Indeed, the Scottish Family Business Association found that only 33% of family firms reach second generation and only 9% make it to the third; despite this, more than half of family businesses have no succession plan in place.  According to our research, 16,000 employers in Scotland will be looking to transfer ownership in the next five years – and employee ownership can be a very successful exit strategy.  Selling a company to its employees, or implementing an employee share plan, can boost productivity, increase employee engagement, and keep the company in the community.” 

“Employee ownership can be a very successful exit strategy for family businesses.  It allows the vendor to exit on their terms, whilst retaining jobs and rooting the business in its community. It is also an effective way to drive business performance; selling a company to its employees, or implementing an employee share plan, can increase employee engagement, boost productivity and drive growth.

“Some good examples of family businesses which have successfully transitioned to EO include agricultural supplier Galloway & MacLeod and technical textiles manufacturer Scott & Fyfe.

“We are seeing a growth of interest in employee ownership year-on-year, keeping us on track for achieving our aspiration of a tenfold increase in employee in Scotland over a ten year period.  Since 2009, the number of employee-owned businesses headquartered in Scotland has more than doubled tripled. 

“Seeking early advice increases the range of options open to a business owner. Scottish Enterprise offers a free Succession Expert Support service, available to all Scottish businesses.” 

For more information on employee ownership and how it could benefit your business, get in touch for a chat with one of our expert advisers.

Fife-based care provider Paramount Care has joined the growing number of employee owned businesses in Scotland with all 26 staff members becoming shareholders.

Set up in 2000 by nurse Ruth Smyth who had a vision of a personalised care service that placed people at its heart, Paramount Care operates throughout Fife, Tayside, Perthshire and Clackmannanshire. Working across the public and private sectors, its team of fully trained carers deliver a range of care services both within people’s homes and within residential care homes.

When it came to exploring succession options for the business, the obvious route was to sell Paramount to another care firm, however, Ruth feared that the ethos her company was built upon would be lost.   We spoke to Ruth to find out more…

“I founded Paramount 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.

“It was never about dropping into people’s homes and doing the minimum in order to fit in as many clients as possible, but about providing a high quality of care with close and trusting relationships between carers and clients. I felt that these qualities, which set Paramount apart from larger care firms, could be compromised if it was bought over by one of them.

“Furthermore, the Paramount team have been very loyal to me and I wanted to repay that loyalty. By selling it to an Employee Ownership Trust, Paramount Care can continue operating as an independent company rooted in the local area, run by people who care about it as much as I do.

“An Employee Ownership Trust will buy shares from our shareholders and hold these on behalf of the employees, and tax incentives will be available to allow employees to invest in the company.

“Paramount’s future is now in the hands of people who understand the importance of great care and will ensure the company continues to go from strength to strength whilst delivering the high standards of care that we’re renowned for.”

This year the International Co-operative Alliance Global Research Conference took place at the University of Stirling on 21-23 June.  Co-operative Development Scotland (CDS) made sure it was in the mix by organising a special session focusing on innovation in Scottish co-operatives.

The session, which included presentations and wide-ranging discussions, was open to invited members of Scottish co-operatives as well as conference delegates. It was opened by CDS director Sarah Deas and was organised and facilitated by CDS specialist advisor Martin Meteyard.

We caught up with Martin to recap on the event and learn more about success of the co-operatives that are driving innovation in Scotland.

The Crinan Canal Water Festival which takes place in Argyll

“First up to speak was Carron Tobin of Argyll and the Isles Tourism Co-operative (AITC), who took us through how a number of businesses on the West coast of Scotland came together as a consortium co-operative to promote the second largest geographical area in Scotland as a must visit destination. AITC represents the interests of around 1,200 businesses and has so far pulled together partnership funding of more than £750,000 for core costs, capacity building and marketing.

“Another consortium co-operative, Terrier Risk Partners (a winner in this year’s Collaboration Prize), was also featured in a video highlighting its approach to dealing with the hot topic of cyber security.

“Next up were Pablo Perez Ruiz and Nathan Bower-Bir from Edinburgh Student Housing Co-operative (ESHC), which provides 106 bed spaces to students across the city and is just completing its third year of operations. Despite offering by far the cheapest student rents in the city, its model of collective self-management – with members building up skills so that they now handle most of the upkeep and repairs – means that it is now recording a surplus of around £50,000 a year and looking to take on further properties.  Significantly, a number of ESHC members are looking to continue living/working in co-operatives once their tenancy ends.

“A co-op providing studio space to graduating artists is already operating successfully, with brewing and landscape architecture co-ops also on the horizon. It’s a great omen for the future of co-operation.

“Then came a focus on how ‘community shares’ are allowing members of the public to invest in the community benefit society model of co-operative. Video and slide presentations highlighted two very different but equally innovative examples: GlenWyvis whisky distillery in Dingwall, which has raised £2.5m; and Strontian Community School Building, whereby over £150,000 was raised to help build a new primary school which will then be leased to Highland Council.

“Finally, just to demonstrate innovation right across the spectrum of different co-operative sectors in Scotland, Bob Yuill, deputy chief executive of the Scottish Agricultural Organisation (SAOS), told the story of how the co-op driven ScotEID digital database system has allowed livestock farmers to take control of their own data for the first time.

“In two hours we could only provide a taster of how co-ops in Scotland are innovating, but it certainly impressed both conference delegates and those attending from our own co-operative movement.”

For more information about co-operative business models, please get in touch and we can arrange for you to speak with one of our expert advisors.

Two of the UK’s most significant businesses are coming together to tell the story of how partnership working delivers exceptional results.

Aquascot is a salmon processing firm based in Alness in Easter Ross. The company employs 170 people and has a turnover in excess of £46m.  Waitrose is the UK’s most popular supermarket with seven stores in Scotland.  Waitrose’ parent company, John Lewis Partnership, employs 90,000 partners across the UK.

We spoke with Aquascot co-founder Dennis Overton and Waitrose supply chain director David Jones, who also sits on the main board of the John Lewis Partnership as a pension trustee, to find out more about the businesses’ success.

Dennis Overton of Aquascot and David Jones of the John Lewis Partnership

Dennis believes that the UK would be in a healthier position if there were more employee owned companies.  He said, “In an employee owned company, the employees have a stake in the business, meaning they are more likely to be concerned about the longevity of the business. Innovation, productivity and profitability are the keys to that longevity, and, as owners of the business, the employees are aligned with these goals.”

David Jones added: “The John Lewis Partnership became employee owned for commercial reasons. The son of the founder, John Spedan Lewis, believed that if he created a more successful business that reinvested in itself, took a long-term view, gave everybody a voice in how it was run, and actively contributed more to community and society, then more people would want to spend money in his shops.  The company’s results suggest he was right. In a ferociously competitive sector which has seen the demise of brands such as Woolworths, BHS, Comet and others, the John Lewis Partnership brands have not only survived, they have thrived.”

Perhaps the wider business world has something to learn from companies such as Aquascot and Waitrose, and the rapidly growing number of successful employee owned businesses.  As the UK lags behind the other G7 nations in terms of productivity, and ranks only 9^th out of 12 for employee engagement levels, new solutions are required. The Ownership Effect Inquiry has been launched to explore the contribution employee ownership makes to productivity and corporate behaviour.  The results will be published in the autumn of this year.

The experience of both Aquascot and Waitrose suggests the findings will be significant. The two companies have consistently demonstrated that putting ownership in the hands of the company’s employees brings commercial success.  That is the power of partnership.

David Jones and Dennis Overton are speaking at a breakfast seminar on 21^st July at RBS Gogarburn. This is the third in a series of events on succession planning, for which employee ownership is one of a number of potential solutions.  Places are limited.

To register or find out more, click here.

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