Letting go as a leader when selling your business to an EOT
What’s your succession plan for your business? The challenging start to 2023 has brought this issue into sharper focus for many founders/owners, hastening their desire to leave completely or step aside from the top while remaining on board.
It can be an exciting time, especially if your exit strategy includes transitioning your business into employee ownership. But like any significant change it can also have a profound impact on you individually as a leader as you prepare to ‘let go’.
At JGA, we’ve listened to more than 150 founders/owners: that’s why we understand that, when it comes to selling your company to an EOT, no leader can truly know how they’ll feel until the transition is done. So how can you prepare yourself as well as your company for the shift to EO?
Securing your legacy as a founder / owner
Founders/owners generally choose employee ownership for a mix of reasons. Commercially, selling to an EOT can be the most tax-efficient option when succession planning – yet legacy and loyalty also often play a part.
Legacy, because the founder/owner wants to secure their company’s long-term sustainability and values. Loyalty, because they don’t want to ‘sell out’ their team or worry that a trade sale will see good people lose their jobs and those skills disappear frm their community forever.
The lack of a natural ‘heir’ in a family business can also influence the decision. Or selling to an EOT can be the logical next step in becoming a values-led company.
Preparing yourself for a different future
Whatever the reasons, it’s a step into the unknown that creates an impact. And like marriage, divorce or moving, this can take time to show.
At JGA, we’ve seen first-hand that how founders/owners prepare themselves psychologically to stay or go will significantly affect the success of the initial EO transaction.
For leaders, mindset matters as much as the legal and financial process. Each client has their own ‘story’ and we’ve yet to meet a founder/owner without a passion for the company they’ve built.
‘Whatever the reasons, [selling your business to an EOT] is a step into the unknown that creates an impact. And like marriage, divorce or moving, this can take time to show. At JGA, we’ve seen first-hand that how founders/owners prepare themselves psychologically to stay or go will significantly affect the success of the initial EO transaction. Mindset matters as much as the legal and financial process’
Shaping your new identity and purpose
So what’s the greatest challenge for leaders planning an EO transition? Being a founder/owner isn’t just a title: it’s an identity. Adjusting to that loss and finding who they now are and a new purpose can be a shock, but it’s also an opportunity for personal growth.
That’s why we enjoy supporting founders/owners to prepare themselves and their leaders through our insightful Coaching through Change and Change Workshops – adapting our approach and tools to engage different learning styles.
Securing knowledgeable support from a specialist adviser who understands EO can be the difference between a successful transition for you and your company and one that takes much longer to bear fruit.
Getting leaders and business ready for change
Our record of working with founders/owners at all stages means we know how to navigate them successfully through an EO transition – and support their EO company to thrive in the years ahead.
Clients describe us as ‘thoughtful’ and ‘easy to talk to’. We enable them to manage their exit and continue to engage meaningfully with their company in future – if that’s what they want.
At JGA, we’re also currently on our own path to employee ownership, bringing an even deeper understanding of its impact to our founder and MD Jeremy Gadd. Jeremy has long had an interest in this aspect of EO transition and even wrote his Henley Business School MSc dissertation on it in 2018!
No surprise then that he is honest about what he expects to be his biggest challenge: allowing those around him to pick up the reins and take us forward, while trusting himself to ‘let go’…
A version of this was first published as a guest blog on the website of one of our trusted partners, Postlethwaite Solicitors.
Want to know how we can support you and your business through our transition, people and governance services? Get in touch with us now.