EO Day gives Scottish businesses paws for thought
Employee owned Shetland Vets is thriving on the islands
Shetland Vets is encouraging businesses from across Scotland to follow its example and take part in EO Day 2016 to find out more about how to unlock the potential benefits of employee ownership.
With 16,000 employers in Scotland looking to transfer ownership in the next five years, EO Day on July 1, supported by Co-operative Development Scotland, is the perfect opportunity for business owners to explore employee ownership as a viable succession route.
Shetland Vets began the process of transitioning to employee ownership in December 2014, with support from Highlands and Islands Enterprise, and is now fully owned by an employee trust.
Research shows that selling a company to its employees, or implementing an employee share plan, can boost productivity, increase employee engagement and keep the business in the community. The Employee Ownership Index (EOI) has outperformed the FTSE All Share in ten of the last thirteen years by an average of nearly 14% per annum1.
Shetland Vets originally began as Westside Vets in 1985 in Bixter. Owned by Juliet and Jim Nicolson, the practice enjoyed successful growth over the years and now operates out of three locations on the Islands – Bixter, Lerwick and Scalloway – with 21 employees.
With Juliet and Jim looking for an eventual exit from the practice without compromising on the extremely high standards its clientele had come to expect, they chose employee ownership as a solution that would not only keep the foundations of business within the community, but also ensures the practice had a stable and sustainable ownership model. The re-brand in 2014 to Shetland Vets marked the new chapter for the business and its employees.
Juliet Nicolson, director of Shetland Vets, explained: “When Jim and I were seeking the best way to eventually take a step back from the business without risking the good reputation we had taken time to build, employee ownership was the natural option for us.
“We have a fantastic team here and we work together with the common goal of providing the very best care to our patients. Becoming fully employee owned only served to reinforce that ethos and is allowing us to gradually move away from the business safe in the knowledge it is in capable and caring hands.
“The staff are now much more involved in running the practice and come forward with ideas and suggestions. People are prepared to step up and take more responsibility and this has been a great benefit to the company.”
Sarah Deas, director of CDS, commented: “It is fantastic to hear how well the practice is doing and that the employees have fully embraced their new status. Shetland Vets was one of the first businesses in Scotland to take on the Employee Ownership Trust model, where the owners are paid the value of their business from future earnings. That way business owners receive a fair price for the company and employees don’t have to dig deep into their own pockets.
“Over the next ten years we aspire to achieve a tenfold increase in employee ownership in Scotland. As the baby boomer generation reaches retirement age, many business owners will be considering what will happen to their business when they choose to take that step back. Starting that process early opens up more options.”
Deb Oxley, CEO for the Employee Ownership Association, which launched EO Day in 2013 said: “Statistics consistently demonstrate that employee-owned businesses outperform their non-EO counterparts in terms of higher levels of profitability; display improved business resilience during times of recession; benefit from increased productivity brought about by higher levels of engagement, and enhance employee wellbeing.
“Recent research2 led by the EOA also clearly indicates that there is a growing appetite from businesses, and especially owner-managed SMEs, for more innovative and financially viable succession solutions.
“EOA members like CDS provide all the evidence needed to demonstrate the success of this model and their achievements act a source of inspiration for other like-minded businesses looking to make the move to employee ownership.”
On EO Day on July 1, CDS will be hosting a webinar from 1pm until 2pm, at which Gavin Stewart from employee owned business Black Light will talk about why he chose employee ownership, the process he followed and how the structure will work for their business. http://www.scottish-enterprise.com/events/2016/07/employee-ownership-webinar
1 Employee Ownership Index 2015
For further information, commentary or photography, please contact the CDS team at Smarts Communicate on 0141 222 2040 / 07970834354 or email cds@smartscommunicate.com
Launched by the Employee Ownership Association (EOA) in 2013, EO Day is a national celebration of the benefits of employee ownership with the aim of raising awareness about the positive impact employee owned businesses have on the UK economy.
On EO Day on July 1, CDS will be hosting a webinar from 1pm until 2pm, at which Gavin Stewart, founder of employee owned Black Light, will talk about why he chose employee ownership, the process he followed and how the structure will work for the business B.
http://www.scottish-enterprise.com/events/2016/07/employee-ownership-webinar
Co-operative Development Scotland (CDS) is the arm of Scottish Enterprise working in partnership with Highlands and Islands Enterprise that supports company growth through collaborative and employee ownership business models. It also works in partnership with other organisations to support the development of community co-operatives such as renewable energy and broadband.
An employee-owned business is one in which the employees hold the majority of the shares either directly or through an employee benefit trust. Selling to employees allows owners to manage their exit and achieve a competitive price whilst 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.
For further information see www.scottish-enterprise.com/cds or call on 0141 951 3055. Follow CDS on Twitter @cdscotland or look at the blog www.cdsblog.co.uk