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Guide to setting up an employee owned business

Done well, employee ownership can offer great benefits for individuals, businesses and roots jobs in regions for the longer term.

Three employees of Richer Sounds

Things to think about

To prepare for an employee ownership transition you should think about:

  • Are your motives the right ones? The business needs to thrive for the future so it needs to be right for you, the business and the employees.
  • Is the business financially stable?
  • How you will finance the sale - vendor (founder) loan, cash reserve, gift, bank loan, third party equity or employees buy shares (or a combination)?
  • What your role in the business will be post transition, for how long, and when you will leave the business entirely.
  • Your grief and emotions that you could experience from no longer owning your business.
“From a growth and retention perspective, employee ownership is significant. If it’s solely about the tax benefits, that’s not the right decision, but if it’s about succession and legacy, then employee ownership really is the right way to go.”
- Answer Digital co-founder Gary Partlett
The Answer Digital team in from of their building
- Answer Digital founders Gary and Kate Partlett

Strong building blocks

The EOA believes that the key building blocks to deliver good employee ownership are good governance, good engagement and communications, and good leadership.

Five more things to make sure you set off in the right direction:

1. Explore which EO model and governance is the right fit for the business.

2. Identify who will lead the business post succession.

3. Plan how and when to bring your leadership team on board with the planning.

4. Plan how to bring your employee owners on the journey with you.

5. What support do you need to achieve your objectives?


More information:

Be inspired by case studies from employee owned businesses 

Download the EOA's How to get started guide

Contact the EOA to be connected with a community of like-minded business, expert advice and learning

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Be inspired by other employee owned co-ops

Read some of our case studies on employee ownership