An employee-run business
A business that thinks, responds, and wins under any circumstances.
An employee-run business
A business that thinks, responds, and wins under any circumstances.
The world of business is changing at an unprecedented rate. To thrive in these changes, organisations need to think differently, respond faster and win irrespective of the internal and external challenges.
This cannot be the responsibility of a single man – the owner.
Across the globe, employee-run businesses is seen as a newer and better way of doing business. They have proven to perform 7x times in comparison to other formats of business.
Employee-run business: The concept
Employee-run businesses are those which are totally or significantly owned and run by their employees. Globally, such formats of businesses have proven to be successful and is also growing. They have shown to achieve higher productivity, more resilience during economic turbulence and also greater levels of growth & innovation.
Employees in shared ownership have also been proven to be more engaged, more fulfilled and more productive at all times. This makes them serve customers and other stakeholders with never-existed accountability and care.
Employee-run business can take one of the three forms:
- Direct ownership by employees – With the help of one or more tax advantage sharing plans, employees can be directly registered as individual shareholders of a part of the shares in the company;
- Indirect ownership by employees – Shares can be held collectively on behalf of employees, normally through an employee trust (more recommended model);
- Hybrid of both direct and indirect ownership – A combination of individual and collective share ownership
Employee-run business: A better way of doing business
In the recent years, we have been fortunate to listen to owners who are concerned about the future of their business. Not just in terms of profits, but generational continuity of their family business.
Many owners have chosen the shared ownership way of doing business, because it proves to be beneficial under following circumstances:
Effective way of ownership succession
Faster growth and expansion
A seed for start-up ecosystem
Improved productivity
Greater pace of growth
Higher innovation
Happier workforce
Compounding growth
Employee-run business: Invest now, Compound in future
Employee-run businesses have proven to be more respectful to two critical business resources – Time & Money. These businesses also ensure that all decisions – strategic and operational are taken on time giving business the first-mover advantage in many cases.
Building an employee-run business requires a series of steps which includes changes at all levels – model, way of working and way of external communications and dealings. This requires investment to be made today, with a guaranteed compounded return in the future.
Employee-run business: Our approach
Over the past 25 years, we have spearheaded businesses to transition from traditional models to an employee-run business. This transition broadly follows a two-step approach:
Employee-run business: Why should I consider?
There could be many reasons why a business chooses to become an employee-run business. The top 5 reasons are as below:
Your business is booming. However, your next generation is either not ready or not interested in your business.
Your business is stagnant for years and the profitability is very low.
You find yourself overly stressed and invested in the business in comparison to what is required.
You are unable to tap into newer opportunities, as you are constantly dealing with the existing business.
You believe that there is a more fair, honourable and better way of doing business than the way it is done today.