Robert-McMaster

CO-OPERATIVE ACQUISITION STRATEGY

Co-operative Acquisition Strategy

The number of “baby boomer” business owners wanting to retire and realise their assets by disposing of their businesses and selling properties is increasing. This could potentially put large numbers of people out of work.

Advice on how to transfer ownership to staff in the way of a workers co-operative through experience is not readily available or easily found in Australia.  Also, existing employee cooperatives can become successful through mergers and acquisitions 

Having recently transferred our 50-year-old family manufacturing business www.cmac.com.au to a workers’ co-operative so I could exit the business and retire, I discovered that co-operatives can potentially be the most socially responsible solution.

This was after a journey of nine (9) years exploring and trying different succession options.

All the below succession options were implemented and tried at C-Mac and the co-operative solution was the only one that got over the line in this economic environment where manufacturing has been struggling and re-inventing itself in

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IMPACT OF EMPLOYEE OWNERSHIP

Below is my summary from the “The Ownership Enquiry – Final Evidence Report” June 2018, which I thought a great introduction for anyone wanting to understand why I introduced employee ownership into our family business. Educating yourself before jumping into launching EO is critical to the success of your succession.

The evidence of the impact of employee ownership on performance is overwhelmingly positive. The most apparent evidence is for smaller firms, firms with larger employee ownership stakes, and in studies over longer time horizons.

Employee-owned firms tend to be more productive, have higher employee engagement, along with factors like rewards sharing, job satisfaction, organisational commitment, and motivation – which is reflected in higher retention and lower absenteeism.

Employee-owned business is more resilient in crises and appear to have a positive impact on the broader community. This evidence has salience in the current economic climate. The economy is increasingly shifting from manufacturing to services. The increasing shift involves the development of … Read more

FAMILY BUSINESS SUCCESSION

What do you do if you cannot find a successor or a buyer for your family business? Sell to your skilled and experienced workforce! “It’s an answer you may have been looking for.”

57% of family businesses have acknowledged that they would have no choice but to cease trading within one year of a severe illness or death of a current owner.

Only 42% have planned for the family business succession.

Family Business Succession Options

Model 1. “Recycling dad” but what if no one is willing or able to step into dad’s shoes?

Model 2. Next Generation ownership and management

Model 3. Have active next-generation owners with a non-family management team

Model 4. Trade Sale or find a private equity investor

Model 5. Management Buyout – Then the question arises; Can the business then sustain another MBO when the managers/owners are ready to retire?

Model 6. Employee Ownership

                6a. Create some liquidy with a minority employee ownership stake. This unlocks … Read more