By Chris Budd
Do you know what your reputation is?
I was recently informed of mine. It’s a very interesting exercise.
The subject came up during a discussion with a friend about why I had not been asked to assist a particular client in their transition to sell to any Employee Ownership Trust (EOT).
The accountant advising the company had commented to this friend that he saw the Eternal Business Consultancy as being ‘not commercial’.
Discussing this further, I was personally described as being something of a ‘purist’.
To be honest, I take the accusation of not being commercial as a bit of an insult. But being a purist..? What did this all mean?
What Being A Purist Means
There are a number of ways to take those comments. On the one hand, I’ve decided that I’m delighted to be thought of as a purist. That means someone who knows their stuff, and does things the right way.
There is, however, a negative interpretation of the word, especially in the context in which it was delivered. It suggests somebody who is not flexible – and maybe even non-commercial.
When discussing this with others, a third interpretation was offered. A purist is someone who will take time to make sure the job is done properly. For an advisor who gets paid when the deal is completed, therefore, this means delaying their fee.
This, it was suggested, is what was really being meant by ‘non-commercial’ in this case.
Why Being A Purist Is Commercial
So, is it possible to be a purist about employee ownership and still be commercial?
Let’s look at two key statements:
- A business owner who sells to an EOT is paid from the future profit of the business;
- An EOT owned business does not function like a privately owned business.
Put these two sentences together, and you will see why it is essential that the business is prepared for life as EOT owned – and preferably in advance.
The way we describe this is the importance of working on the transition before the transaction.
This will give the best chance for the company to succeed when it is owned by an EOT, and reduce the risk to the owner of not getting paid.
What could be more commercial than that?!
Proud To Be A Purist
I have therefore decided to wear my badge of purist proudly.
If you are an owner who wishes to spend time preparing your business for the sale to EOT, a purist is what you need, in order to make sure you get paid.
If you are a director of a business which has recently been sold to an EOT without much preparation by the former owner, a purist is what you need to help the leadership team and the employees adjust.
If you wish to sell to an EOT quickly, then a purist is not what you need – but you really should introduce us to the new leadership team!