Too many business owners neglect business succession planning as they are busy running their business on a day-to-day basis. However, a well-planned exit strategy, which passes ownership and control of the business to its employees, could be the best decision an owner can make for the future of the business.

“At the Wales Co-operative Centre we have nearly 30 years’ experience of working with owners and employees to transfer businesses into worker co-operatives”, states Project Manager, Rhian Edwards.

“We’ve worked with small and large firms including mechanics, architects and scientists and we were instrumental in the Tower Colliery buy out in 1995. We are able to advise business owners who wish to sell their businesses and work with employees to take over their company. This is not usually promoted as a conventional succession route – professional advisers often advocate a business sale or management buyout option. However, a worker buy-out has the advantage of ensuring a business is left in the hands of people who have a vested interest in making it succeed”.

A worker buyout can circumvent the need for a potentially hostile business sale and it can save the company from unnecessary redundancies.

“Our business succession services are aimed at the employees”, states Rhian, “we do not feel there is any issue with professional advisors raising the awareness of this option with their clients as we would represent their client’s employees, not their clients”.

In Blaenau Gwent, the Wales Co-operative Centre worked with a group of employees who created Primepac Solutions Ltd. The nineteen staff members at the factory invested their redundancy payments into the company when the Dutch owners pulled out. The Centre provided legal and business planning advice and helped the company access development funding.

In Aberystwyth, the Centre supported a biotechnology instrumentation specialist, Aber Instruments to install an Employee Benefit Trust and a Share Incentive Plan as a means of handing the company over to its employees over an agreed period.

Barry Wise, Managing Director of Aber Instruments commented, “The Wales Co-operative Centre helped us put together a long term succession plan. We created an Employee Benefit Trust and over several years have been able to reduce our shareholding and transfer over 75% of the company to our employees.”

Rhian Edwards is Manager of the Business Succession and Consortia Project in the Wales Co-operative Centre. Rhian, along with her team of development officers are trained to offer advice, guidance and support to employees setting up as worker co-operatives.

To find out more about Business Succession, employee ownership and business consortia, call the Wales Co-operative Centre on 0300 1115050  or access the website www.walescooperative.org/employee_buy-outs