Thousands of SME owners plan to exit their business in the next five to 10 years – with many citing the wish to retain their existing workforce and maintain business continuity as priorities. Yet understanding of employee ownership as a succession option that could provide many of the things they want remains comparatively low.

This is one of the key findings revealed in a new report into EO and succession planning released today.

‘Generation EO: The Great Succession Opportunity’ was commissioned by Ownership at Work (OAW), with the support of the Employee Ownership Association (EOA) and the Federation of Small Businesses (FSB).

JGA is delighted to be one of Generation EO’s co-sponsors, with our MD Jeremy Gadd describing it as ‘exciting evidence of the employee-owned sector’s potential to grow’.

Building awareness of EO

The release of Generation EO strengthens the body of data-based research now available on the UK’s employee-owned sector, including the EOA’s ‘Knowledge Programme’ (published last month).

‘At JGA, we’ve long recognised the opportunities in EO models to increase employee retention and engagement, support business continuity and enable sustainable growth and entrepreneurial risk taking,’ says Jeremy.

‘This report shows how useful an increased awareness and understanding of employee ownership would be to company owners exploring alternative options for their succession planning.’

Understanding the size of the opportunity

Aardman, which our MD Jeremy (right) visited this autumn, features in the ‘Vendor’s Experience’ section of the report

For Generation EO, Ownership at Work commissioned DJS Research to survey 500 businesses, with the focus on SMEs.

This part of the research was designed to deepen understanding of the ‘great EO succession opportunity’ expected in the next five to 10 years.

Alongside this, OAW carried out its own in-depth interviews with business owners who had already sold to their employees.

Ten vendors, ranging from Clean Tech Services and Aardman to B-Loony and Hartland Shipping, were asked to share their first-hand experience of transitioning to EO.

Areas covered included their motivations and practical tips for other company owners considering the same.

Securing expert support

Associate Lisa Fryer led JGA’s involvement in the report

Our Operations Manager and Associate Lisa Fryer, who led JGA’s involvement as co-sponsor, is impressed with the quality and depth of information that the teams at DJS Research and OAW compiled.

‘Every advisor would benefit from understanding the detail covered in Generation EO, and considering their own plans to support this potential as EO awareness continues to build,’ she says.

‘At JGA, we’ve developed a broad selection of commercial and cultural services as a direct result of listening to our EO clients’ needs – ranging from EO perception studies and health checks to strengthening trust board effectiveness.

‘We also offer support with main board development, independent trustee resourcing and governance reviews. Generation EO has given us even more useful (and exciting!) food for thought.’

Learning from the experience of others

‘The ‘Generation EO’ report shows there are so many numbers that just stack up as positive reasons for employee ownership to be seriously explored by every business owner as part of their succession planning’

Lisa Fryer, JGA Operations Manager and Associate

Lisa reveals that one part of the report she particularly ‘loved’ was the ‘Vendors’ Experience’ section, with its mix of businesses sharing their stories of transitioning to EO.

‘It's great to see the range of business size and values featured, clearly setting out how moving to an EOT is worth consideration.

‘This will definitely be a useful and influential report for the EOA team to reference with policy makers and advisors,’ she adds.

‘It shows there are so many numbers that just stack up as positive reasons for EO to be seriously explored by every business owner as part of their succession planning.’

Recognising the scale of change

Lisa was also struck by the scale of the change predicted in the next five to 10 years as a result of succession planning across SMEs, describing it as both a challenge and an opportunity.

‘What really stood out for me was the possibility that EO offers as a viable succession plan for literally thousands of smaller businesses across the UK,’ she concludes.

‘With so many vibrant and successful businesses carving out their niche in communities all around the country the question is: how do we best inform and support them to unlock the potential employee ownership offers? I know we'll be giving this some serious thought at JGA.’

DOWNLOAD THE REPORT

Want to read the full report? Download ‘Generation EO: The Great Succession opportunity’ here.

GET IN TOUCH

To find out how JGA could support you to explore employee ownership as a succession option for your business, get in touch.