Join this session
11am, Wednesday 22nd September 2021
This is for Agency Hackers members. If your agency isn’t a member yet, please sign up here.
STORY OF A SALE: Torchbox
- There are several things to choose from when it comes to finding your agency’s perfect exit strategy.
- For Torchbox, an employee ownership trust (EOT) was the perfect fit for everyone involved.
- We’ll be chatting to James Leavesley, the agency’s Managing Director, about their EOT journey and how they’ve fared.
When you’re considering your agency exit strategy, there’s a lot to choose from.
For Torchbox, a digital product agency for non-profits, an employee ownership trust (EOT) was the perfect fit.
“We could have gone down the trade sale route, but EOT stood out as a better route for our ethos,” says James Leavesley, Torchbox’s Managing Director. “We felt this gave us more control in the long run and made sure we were giving back to our employees rather than just being sold out to a larger company.”
As always, there’s a lot of legal stuff to go through, including valuing the business – something that usually would come from prospective offers in a trade sale.
“We asked ourselves, what is the right value for Torchbox? How long do we want the EOT to then have to pay back?” he says.
The next, and integral, step is employee engagement.
“You want your employees to be empowered by and completely engaged with the process, so you have to think about how you tell the team, how you talk to them about the benefits of it, and make sure they’re not concerned by the change in company structure,” says James.
“One of the challenges with EOT is that nothing happens overnight, and we had a lot of key man syndrome at the start,” he continues. “But now there’s a lot more depth of leadership, with more people in the middle and senior leadership tiers stepping up and leading better. I think people care more about our vision and strategic objectives, what they are and ultimately, what they actually mean to them.”
Torchbox set out on its EOT journey with the aim of implementing changes within the standard five-year window. However, by May 2022 they’ll have completed the process, taking them to just two and a half years.
“A lot of things start to become real, quicker,” says James. “It takes some time to embed these things, and the idea is over five years you use that time to make sure you’ve got a good succession plan for people leaving, thinking about where the company can grow, where staff can take on different roles, as well as thinking about how salary and bonus structures can change.”
“With EOT, there’s a complete change in mindset which has made a difference to how things at Torchbox are run.”
Join us as we talk to James about Torchbox’s EOT adventure and why it was the right fit for them – it might even be the right fit for your agency, too.