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RESILIENCE AND SUCCESSION The panel believes that enabling further growth of EOBs will contribute significantly towards government efforts to grow and support the resilience of regional economies, thereby answering a major priority of the industrial strategy. A deciding factor in the growth of local and regional EOBs over the next decade will be leaders of SMEs and family-owned businesses planning for succession. The UK’s record on business succession is relatively poor, with workers, owners and local economies often left at risk because of poorly planned and managed ownership transfers. More should be done to promote employee buyouts as viable alternatives that typically leave secure and thriving businesses in their wake and, with them, highly satisfied exiting owners. The panel discovered poor levels of EO familiarity and understanding among financial institutions nationally, regionally and locally. Opening up easier access to affordable finance will provide regions with a form of inward investment that will be a critical asset to both employee buyouts and the growth of existing EOBs.

RECOMMENDATIONS

1 Regional enterprise bodies and combined authorities should work with the EO sector to create trailblazing pilots focused upon resilience and succession. These multi-year schemes should focus upon driving economic resilience through a blend of awareness-raising (particularly among exiting business owners), hands-on support and attracting inward investment to support local EOBs. Local enterprise partnerships, growth hubs and other business organisations should help to establish peerto-peer networks that will support business leaders in their efforts to move towards the EO model.

2 Financial institutions at national, regional and local levels should work with the sector to raise levels of EO understanding and explore new mechanisms to drive investment into local and regional economies, including: •

• • •

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The British Business Bank (or another official lender) should provide partial loan guarantees for EOT transactions involving smaller SMEs. This would match an equivalent service offered by the US Small Business Administration. Institutions should create regional investment funds focused on EO firms that contribute to local economies, including local authority pension funds and other sources of third-party capital. The Bank of England should host a symposium for our leading financial institutions on the scope for investment and lending within the EO sector. The Investment Association should raise awareness and understanding among its members of EO as a hybrid business model of employee and investor ownership.

Profile for LID Business Media

The Ownership Dividend  

The Ownership Dividend The report of the The Ownership Effect Inquiry. Copyright 2018 Employee Ownership Association and LID Publishing.

The Ownership Dividend  

The Ownership Dividend The report of the The Ownership Effect Inquiry. Copyright 2018 Employee Ownership Association and LID Publishing.