19 July 2018
Employee ownership is clear succession solution for Balhousie Glazing
Glazing company chooses EO to protect jobs and maintain 25-year reputation
A Perth-based company specialising in the delivery of glazing projects has joined the growing number of employee-owned businesses in Scotland, with 12 staff becoming owners.
Founded in 1993 by Malcolm Sweeney and Drew Hay, Balhousie Glazing operates throughout Perth, Dundee and beyond, providing a wide array of services such as windows, doors and patio installation and the building of conservatories, porches and orangeries. It has a turnover of £1,250,000. With experience ranging from small residential builds and renovations to major commercial projects, the team manages every phase of the process, from initial design and planning permissions through to all aspects of the build.
Commenting on the decision to become employee-owned, Malcolm Sweeney said: “Drew and I had been discussing the issue of succession, and as neither of us had family members in the business, the only option we were really aware of at the time was a traditional trade sale. We would likely have been purchased by a rival company, something we didn’t want. However, one day we were reading The Courier, our local paper, and spotted an article about a nearby seminar being held by Co-operative Development Scotland (CDS) the following day and decided to go along.
“It was about business succession and one of the speakers was Bob Anderson, financial director of Bentley’s Shopfitting, an employee-owned company based in Dundee. He spoke about how the EO process had worked for them and the benefits of employee ownership and we were really sold on it.
“A lot of our staff have been extremely loyal, and it was essential to us that we safeguard their jobs and ensure they could continue paying their mortgages and providing for their families. Being employee-owned would anchor the company in the local area, keeping our team’s extensive skills here too. We contacted CDS and one of its advisers paid us a visit to give us more information before we decided to proceed with the employee buyout.”
Drew Hay continued: “We had a meeting with our employees about the decision and they seemed really happy and ready to embrace their new role as employee owners. With a vested interest in the business, they will reap the benefits of strong performance, so it’s been a positive boost for morale and motivation.
“As well as retaining jobs, employee ownership will ensure the business maintains its values and ethos. Much of our work comes from word-of-mouth recommendations, and our reputation, which we have been building for 25 years, is very important to the success of the business. A trade sale to a competitor may have affected our standing in the local community or impacted the excellent customer service for which we are renowned, both of which could have a negative effect on referrals.”
An Employee Ownership Trust has been formed and holds 100% of the shares on behalf of the employees. The transition to employee ownership was supported by Co-operative Development Scotland (CDS), with the process managed by CDS’ Alistair Gibb and legal services by Gilson Gray.
Sarah Deas, director at Co-operative Development Scotland, the arm of Scotland’s enterprise agencies which promotes employee ownership, said: “Malcolm and Drew wanted a solution that would ensure job security for their loyal staff and a continuation of their company’s hard-earned reputation. The fact they made their final decision to go down the EO route after speaking to the founders of other employee-owned businesses is a real testament to the benefits of the model, and we are confident Balhousie Glazing will prosper as a member of the EO community.”
Malcolm concluded: “We would urge any other businesses weighing up their succession options to consider employee ownership and to visit existing employee-owned businesses to learn more about how EO works. It was a visit to Bentley’s Shopfitting that sealed the deal for us and we are now very excited for the future of Balhousie Glazing.”
For further information, commentary or photography, please contact the CDS team at Smarts Communicate on 0141 222 2040 / 07970834354 or email email@example.com
NOTES TO EDITORS
Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability; improved business resilience during times of recession; increased productivity brought about by higher levels of engagement and enhanced employee wellbeing.
Co-operative Development Scotland (CDS) is the arm of Scotland’s enterprise agencies that supports company growth through collaborative and employee ownership business models.
An employee-owned business is one in which the employees hold the majority of the shares either directly or through an employee ownership trust. Selling to employees allows owners to manage their exit and achieve fair value while safeguarding the long term future of the company. Employee ownership gives employees a meaningful stake in their organisation together with a genuine say in how it is run. It roots business in Scotland, drives performance and delivers economic wellbeing.
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