The first step is to check that an employee buyout is a realistic option. What are the objectives of the owner - and what do the employees want? A rough assessment of how much the business is to be sold for and its future prospects is important. Would a buyout be financially viable?
If a buyout seems a possibility, more detailed plans need to be developed. The business plan is likely to need updating to take account of the planned changes and to help raise any financing. The proposed structure for the employee buyout needs to be decided, taking into account the tax consequences.
You'll probably also want to agree a preliminary timetable for the buyout. At the same time, you should start developing plans for once the buyout has been completed. Involving employees is a key part of this process. Read more on planning for an employee buyout.
Finance and price
The price and terms and conditions of the deal can then be negotiated in detail. At this stage both owner and employees will need specialist advice, though they may well have involved advisers much earlier in the process. See help and advice for employee buyouts. At the same time, financing can be arranged.
Final stage - deal is completed
Once everything is ready, final documents are signed, financial arrangements are put in place and the deal is completed. The new owners take control of the business. Read more on running the business after an employee buyout.