How to achieve an employee buyout

Planning for an employee buyout

Changing from a business controlled by an owner-manager to a business owned by its employees can represent a big shift in culture. Employees may never have considered the possibility of becoming owners, or feel that it is too risky for them. They may also be reluctant to get involved in decision-making when they see that as your job.

Getting employees involved in the buyout

It's essential to involve employees in the whole process of moving towards an employee buyout. Communication is essential, you should look for ways to share information with employees, such as newsletters and regular meetings. You should also make sure you consult employees on key issues, particularly where this is a legal requirement. SeeĀ inform and consult your employees.

The more time you have, the easier it is to create an ownership culture like this. You also have more options for the way the buyout is financed and organised. For example, employees could be gradually awarded shares, or a trust could be formed to assist the buyout. SeeĀ financing an employee buyout.

Typically, final planning of an employee buyout takes anything from two to 18 months. Changing the way your business operates can be the most important - and challenging - part of the process. See more on change management.