As increasingly the baby boomer generation is looking to retire, the traditional route of selling on is being challenged by some more forward looking, socially aware entrepreneurs. Many baby boomers have built their businesses not on a 'them and us' culture (ie owner and staff) but on a team-based approach. So when it comes to exit, why should it be different ?
Historically entrepreneurs have kept ownership tight and, instead, offered cash incentives and bonuses on performance - the cheque at Christmas which, some may remember, never came in National Lampoon's Christmas Adventure.
Some entrepreneurs have set up limited, very limited, EMI and option schemes but, now it is time to exit, some are looking at ESOPs.
MBOs or BIMBOs are seen regularly, but ESOPs can be used to widen the employee base, reward loyalty and keep teams together.
Employee owned businesses like John Lewis are held out as great examples of the 19th century cooperative movement in practise. In the 21st century retirees should look at ESOPs in the same way that they look at sales and MBOs.
Leaving a Legacy: Why Some Sellers Choose ESOPs