By Chris Budd

Heron House Financial Management Ltd (HHFM) are Chartered Financial Planners and Wealth Managers based in Newport in South Wales. They have 20 employees.

I met the owners, Saran Allott-Davey and Chris Jordan, several years ago when they were first exploring the possibility of selling a majority of their business to an Employee Ownership Trust (EOT).

They subsequently signed up to our Eternal Business Programme, and joined several other companies who had also started working through the programme.

After a few months, the leadership team of HHFM was brought into the process.

One of the team was Cassy Lewis, the operations director.

HHFM completed the sale to EOT in September 2020. I spoke to Cassy in May 21 to ask her about her experience through the transition, and, looking back, what they did right and what they might have done differently.

Early Days

As part of a three person leadership team, Cassy felt excited but daunted when the owners first informed them of the EOT plan. Saran and Chris had been working through the programme for several months prior to the meeting, and this preparation significantly helped the leadership team to understand what the change might mean for them, and for the business.

For example, they initially thought that this was just a change of ownership, and that the business would carry on broadly as before. However, they quickly realised that EOT ownership would result in significant changes, and that these would need to be managed.

They also realised that part of the transition process would be getting the employees to accept that there were going to be changes.

Although her reaction to the news was a very positive one, Cassy did do her own research into the EOT, and recommends that everyone takes time to consider whether it is right for them.

Core Proposition

Particularly important was the work that the owners had undertaken in the first course of the programme on their core proposition. Being presented with a document outlining the key areas of the business that the owners wanted to see continue provided a real focus for the leadership team.

The work on their Flag – the purpose of the business – proved particularly important as a continual focus for any changes in the business.

The Roadmap

Initially, the owners anticipated that it would take only a few months to prepare the business for sale, as the business was already very close knit. Fairly quickly, however, it became apparent that there was a lot more to do than they had expected.

Key to providing structure was a roadmap that HHFM designed (a template roadmap that you can use, based on the one that HHFM constructed, is available for download in course two of the Eternal Business Programme). This provided clarity over who was doing what, and when they would be doing it.

One tip Cassy gives is that nothing should be deleted from that roadmap. They found it very useful on days when they felt a little overwhelmed to be able look back and realise just how much they had already achieved.

She also stresses the importance of not considering the roadmap to be complete, to see it as organic. They continued adding more to it as they went through the programme.

You Are Not Alone

HHFM went through the programme with other companies, meeting on a quarterly basis. Cassy found this to be especially useful by having set days to make progress.

HHFM are a very inclusive company. As Cassy puts it: “We can speak to each other more than we do our own families”. Nevertheless, she found that by going through the transition to EOT with people from other companies, she gained a perspective that would not have been available by just talking to people in her own business.

Announcement Day

HHFM were celebrating their 25th anniversary in 2019. During a celebration away day, the owners played a trick on the employees. They were presenting their plans for the future of the business, and clicked onto a slide which stated ‘We are selling’.

After just 10 seconds they then moved to a second slide which added ‘…to an EOT!

Cassy vividly remembers the look on the employees faces at that first slide. The concern and worry that she saw really brought home to her firstly how much the employees cared about their business, but also gave a great comfort that they were doing the right thing in selling to an EOT.

Top Tips

Looking back, Cassy would offer the following tips to others who are going through this journey:

  • Take time. Things aren’t always as you might think they are, and people don’t always react in the ways that you expect;
  • Work on the core proposition. The focus that document gave business decisions was key;
  • Make sure your Flag is really clear and well communicated;
  • Go on the journey with others to gain a different perspective;
  • Don’t stop after the sale. Running an EOT business still requires planning and consideration;
  • It can be great if founders carry on being active in the business, especially if their role is a supportive one, and clear to everyone.

The last couple of years have been hugely exciting for Cassy and HHFM, and they consider the sale to the EOT an extremely positive experience. This has only been achieved, however, by a lot of work and preparation.

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