Employee ownership process: key steps

To establish employee ownership, there are several steps that should be followed.

1. The first step is to check that employee ownership is a realistic option. What are the objectives of the owner - and what do the employees want? A rough assessment of how much the business is to be sold for and its future prospects is important. Would a buyout be financially viable?
2. If employee ownership seems a possibility, more detailed plans need to be developed. The business plan is likely to need updating to take account of the planned changes and to help raise any financing. The proposed structure needs to be decided, taking into account the tax consequences.
3. You'll probably also want to agree a preliminary timetable. At the same time, you should start developing plans for once the buyout has been completed. Involving employees is a key part of this process. Read more on planning for employee ownership.
4. Finance and price - the price and terms and conditions of the deal can then be negotiated in detail. At this stage both owner and employees will need specialist advice, though they may well have involved advisers much earlier in the process. See employee ownership: help and advice. At the same time, financing can be arranged.
5. Final stage - once everything is ready, final documents are signed, financial arrangements are put in place and the deal is completed. The new owners take control of the business. Read more on running the business after an employee ownership.