Drive to encourage EBO’s as research reveals employee owned businesses more profitable
Three leading business advisory organisations are joining forces to encourage more Scottish business owners to consider an employee buyout (EBO) in the light of new research that shows employee-owned businesses are more profitable than non-employee-owned businesses.
The research, by Cass Business School and supported by John Lewis, shows that employee-owned businesses employing 75 staff or less generate substantially better pre-tax profits than non employee-owned businesses of a similar size.
Now ACCA (the Association of Chartered Accountants), Co-operative Development Scotland (CDS) and the Scottish Family Business Association (SFBA) are hosting a special workshop to help business owners, senior management and advisers explore in detail the process and rationale for an employee buyout.
The research will also be of particular interest to Scotland’s business community and policy makers, given the high ratio and number of SME’s in the economy – of Scotland’s 300,000 businesses, the vast majority employ less than 10 people. The implication from the research is that employee-ownership builds more profitable, effective businesses – and that Scotland’s economy would benefit from more such businesses. Currently there are 50 plus employee-owned companies in Scotland, with a combined turnover over £700 million and employing more than 4500 people.
Peter Fee, President of ACCA Scotland will host the event and will be joined by Glen Dott from CDS and Geoff Miller, group finance director for Tullis Russell Group. Peter Fee says: “Business owners need to have an appropriate succession strategy and one option they may not have considered is selling their business to employees. This is an increasingly popular choice, and allows the business owner to realise the value in their company whilst preserving its future.”
“It is also well-documented that employee-owned businesses are more productive and sustainable than traditional, shareholder-based businesses, so there is a compelling economic case to encourage more EBO’s” said Sarah Deas, Chief Executive of Co-operative Development Scotland. “Employee-ownership is a hidden gem at the heart of Scotland’s economy and we would encourage more business owners, senior management teams and advisers to consider employee-ownership, particularly when a business owner is thinking about exiting.”
Geoff Miller, Tullis Russell Finance Director and one of the presenters, adds: “The Tullis Russell Group has been employee owned since 1994 our success is proof that employee ownership is a very effective model for running a business. We are a demonstration of how employee ownership can allow business owners sustain their legacy and maintain employment in their local communities, while realising good value for their business.”
The specialist workshop will be held on Tuesday 30 March at Glasgow Caledonian University, from 6.30 to 8.30pm. Tickets are free and can be reserved by emailing hannah.salvidge@uk.accaglobal.com, or by calling 0141 534 4810 by Monday 22 March 2010.
More information on the Cass Business School research can be found here:
Ends Date: 22.3.2010
More information: Ian Spinney – 07973 671773
About ACCA
ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 393,000 students and 137, 200 members in 170 countries worldwide. ACCA has worked with governments, national organisations and development agencies in emerging economies- for over 20 years - promoting the accounting profession, to create value for the communities, businesses and individuals it serves. ACCA believes that globalisation of business means that one set of reporting standards is essential. We favour the principles-based IFRS. ACCA understands the real issues facing small businesses as 63,000 of our members work in SMEs or small partnerships worldwide.
About SFBA
The Scottish Family Business Association was incorporated in September 2005 and is a non profit-making organisation run for and by business families. 73% of family businesses want to keep the business in family hands from one generation to another yet only 33% make it to the second generation and 9% to the third - cumulatively a massive loss to the economy, to local communities and to national progress. SFBA helps family businesses and business families get access to the support, education, training and professional advice specific to their distinctive model of business so they can realise their full potential.
About Co-operative Development Scotland
CDS is a wholly-owned subsidiary of Scottish Enterprise. The organisation was established by the Scottish Government to promote and support the development of co-operative and employee-owned business models throughout Scotland. CDS supports the remit of Scottish Enterprise, Highlands & Islands Enterprise and Business Gateway. A specific focus is on growth industries, including food and drink, renewable energy, forestry and tourism. Co-operative business models have a major role to play in the growth of these sectors.
CDS has its own Advisory Board comprising industry representatives and co-operative experts. By working closely with key partners, CDS aims to demonstrate the improved productivity, sustainability and community benefits that co-operative models can offer. Its remit is to:
- Raise awareness of co-operative business models
- Help new and existing co-operatives to grow
- Develop markets for co-operative and co-owned businesses
Contact Information
Julia McLaren
Engagement Partner
Scottish Enterprise
0300 013 3223
07801 794046