• As an agency leader, there will come a day when it’s time to take a step back…
• …but what if you don’t want to completely remove yourself from your business?
• In this session, Andy Hayes explores the topic of employee-owned businesses, telling the story of his agency’s journey to becoming one, and the benefits of doing so.
Transitioning your agency into an employee-owned business can be a win-win way to sell: you get a tax-free exit, and your team earns a stake in the business.
Since January 2020, Quietroom has been wholly owned by an Employee-Ownership Trust.
“We had two founders who wanted to spend less time on the business, and they were thinking about their exit strategy,” Andy says.
“Originally, they were going to take advantage of a director’s dividend. But that meant they couldn’t have any financial involvement in the business at all, and they didn’t want to walk away completely.”
After much deliberation, a lawyer friend suggested they go down the EOT pathway.
“We thought, ‘Oh, this is good’. Because you can sell the business, and the owners don’t pay any tax at all,” Andy says. “The government was encouraging it.”
“It was not only a tax-efficient strategy for the directors who wanted to step down, but it was also good for the business as a whole. Because, culturally, we just didn’t want to sell to a big horrible corporate.”
Andy suggests there are three things you need if you want to do this:
- A good lawyer. (“We used Baxendale – a law firm that specialises in EOTs,” says Andy.)
- At least four months to work on it.
- Good comms with your staff.
“Our people were really excited that we weren’t going to be bought out by someone else, but were going to become an employee-owned business instead,” he says.
But it’s not just his existing staff that it’s exciting for.
“Clients love it as the people they work with own the business and understand how crucial they are to its success. And I think it gives us an advantage when it comes to hiring too,” Andy says. “It’s not just saying that we care and we value our employees, it’s an actual demonstration of that.”
Come along to hear Andy share how his agency transitioned to an employee-owned business, and the reasons why you should consider it too.