- The Agency Architect
- Posts
- My Ultimate guide to Employee ownership with trust (EOT)
My Ultimate guide to Employee ownership with trust (EOT)
My business partner and I both started working full-time on our business in January 2019. From the beginning, we were aligned in our vision to build a performance-based business that we could eventually sell.
We initially set a rough timeframe of 5 years as a goal to work towards, but we planned to reassess each year to understand how far away we felt we really were and if these timeframes were realistic.
During the first year of running the business, we made the decision to engage with a merger & acquisitions (M&A) partner to help us position the business for sale. However, this was way too early in our journey and a waste of time and money. The M&A company sold us a “growth package” that was ineffective and did not align with our goals.
On the flip side, this experience provided us with valuable insight into the corporate world of M&A. It wasn’t for us. The whole concept of it cried out greed and short term-ism in an attempt to get the founders and extra bit of cash over the long term benefits of the business and its staff.
Our relationship with the M&A company only lasted around 4-6 months. At this point we were scaling very quickly and started to hire some more senior members of staff. Some of which had worked at previous agencies that had been sold. When we heard the experience from a staff perspective of what the experience is like going through a buy out it was a big eye opener.
I believe that agencies, in particular, face unique challenges in the buyout process. Why? Because agencies place a strong emphasis on their people.
The staff members are instrumental in building the company and are often the ones who transition to the acquiring agency. Their knowledge and expertise essentially form the intellectual property (IP) that the larger agency is acquiring. While processes can be developed, it ultimately depends on the individuals to share this knowledge in a way that aligns with your clients goals, adapts to their needs and delivered inline with the values of your agency.
Your clients are people that you’ve sold in a concept to, they’ve trusted you. They also build a relationship with your staff who post-sale start thinking what’s next for me, is my job safe, do i want to be part of a corporation.
From a founder’s perspective, eventually, the business that you have worked so hard to build will become absorbed into the larger group, and an important part of your personal legacy is gone.
Finally, some of the strongest agencies scale on the back of a strong culture. This culture is build on trust, openness and communication. When your agency gets bought out it’s usually going to be a large corporation or group which is going to have a very different way of working and operating so overnight the company that your staff joined has changed.
After considering all of these factors, we couldn’t help but wonder if there was another way. The current system seemed broken.
There was, and it’s called employee ownership with trust (EOT). Below is a collection my articles that cover all of the important aspects to selling your agency through an EOT.
Global State of play for EOT
This is my Forbes article outlining the state of play of EOTs across the world. This business model is a UK-led initiative that’s starting to gain traction in the US and Australia.
You can read more about this here:
What exactly is an EOT?
This post covers all the specific aspects of what an EOT is. How it operates legally, the benefits to staff, clients and you as a founder.
How does being an EOT align with my expectations?
This is the final post in my series which outlines how the first 18 months of running an EOT business has been. I also cover an honest assessment of how running an EOT aligns with my initial expectations before we engaged with the process.
If you are considering selling your agency and would like to hear more about an EOT or ask me any questions feel free to drop me an email with ‘EOT’ referenced in the subject line: [email protected]