Discover how we empowered a team through an EOT.

Empower and retain with an EOT

The Situation

As part of putting together their business exit strategy, a husband and wife duo wanted to provide a solution to all of their employees.

Embracing their strong culture, they approached us about setting up an EOT to help retain employees for the long term.

A team of around 20 people would be set to become part owners of the company, whilst a board of 5 people was to be created to support the exit strategy and management of the business.

The Challenges

To successfully set up an EOT, we had to guide the company through various administration processes. In addition to using solicitors to assist with the trust set up and formation, we had to place a value on the business; this was approved by HMRC.

Whilst an EOT is a good strategy to adopt there is a risk that the people who are promoted to become managers or trustees are not yet ready to run the business, rather than another strategy such as an MBO where there is an existing management team ready to step in. It is therefore essential that the managers, and trustees, fully understand and are supported in their new roles, with the exiting shareholder commonly remaining involved in the interim.

“Having an EOT in place is vital in retaining staff and also attracting new employees.”

The Solution

The owners identified 5 people to become part of the board, holding conversations with them to identify their strengths and what they could bring to the table. Once the admin side had been set up, we hosted an open forum with all employees within the company, giving them the option to discuss any concerns and queries they had.

The Impact

The new EOT structure was set up and a trust formed for the company.

The board of 5 team members are working well together and have even approached us to join the board, becoming a professional trustee to assist with guiding the strategy of the company to help push it forwards.
They have found that having an EOT in place is vital in retaining staff and attracting new employees.