North Somerset businessman who passed company onto staff says employee-ownership ‘will be massive’
- Credit: Paul Groom
A North Somerset businessman is among the first in the country to pass his company over to his employees using a Government scheme.
Chris Budd, from Backwell, set up his financial planning company Ovation Finance in 2000.
He learned about employee ownership trusts, whereby the shares and responsibilities are transferred to a trust for the benefit of the staff, after attending a regional meeting by the Employee Ownership Association and set about doing the same at Ovation Finance.
Chris said: “It is a new way of owning a business and it will be absolutely massive. It was starting about four years ago, but it is just starting to explode.
“It allows you to exit a business without selling to a third party, it enables it to carry on, and it allows the employees to access the profits and control the business.”
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The John Lewis stores work on a similar principle, where employees have part-ownership of the company and share in its profits.
At Ovation Finance, the employee ownership trust owns the majority of the shares and the profits. Those profits will be used to pay Chris out of the company.
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Chris said: “What I wanted was a way out where I could leave a legacy with my business.”
Employee ownership schemes are best suited to businesses with 10-250 employees – of which there are around 280,000 in the UK.
However, there are only 320 employee-owned companies at the moment.
Chris is so passionate about the business model, the next stage in his career will involve consulting with other firms so they can do the same.
He has set up the Eternal Business Consultancy to show other business owners how they can sell their firms to an employee ownership trust.
Chris said: “Moving to employee ownership is a big step and needs a lot of thought and employee engagement. You have to plan and prepare for it.”
Chris thought his offer was ‘amazing’ when he first presented it to staff, but not everyone saw it that way at first.
He said: “They all love it now. But it did take a little explanation and time.
“An employee-owned business doesn’t look and act like any other type of businesses. It is a big change in culture.”
His book, The Eternal Business, will be published in September.