The Tentacle

Employee Ownership

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Alternatives to Sale

In 2017, there is a perfectly viable alternative to a sale of any business, unfortunately, too many brokers are distracted by the enticing concepts of villa and golf course that they fail to consider it early enough.

The alternative is employee ownership (EO).

In the olden days’ people used to call this a Management Buy Out (MBO), but it rarely happened in the broking world. This is because the younger ‘Management’ of the provincial broker could seldom raise the money from local high street banks to buy-out the owner(s), who may well have preferred this outcome to any other, but believed mountain of succession too steep to climb.

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More about Employee Ownership (EO)

Since the explosion in the number of provincial brokers from the early 70s, the end-game has focused – with few exceptions – either on sale or inheritance as the only two exit strategies for the founders.  Happily, there is now another way, an alternative that captures the zeitgeist of the times into which we have been delivered.  Employee Ownership.  

Before going any further, one should make the distinction between Employee Ownership and employee *Share Schemes *by pointing out that these two similar concepts do not necessarily amount to the same thing. 

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4th July - Employee Ownership Day

On the 4th July TEn celebrated its transition to Employee Ownership (EO) on what is, annually, National EO Day.  I was particularly grateful to be invited to go and speak about our decision to embrace EO elsewhere, otherwise I would doubtless have been required to adopt some form of silly American fancy dress; as did most of my colleagues!

The question is, why have we done it?

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