Why EOTs belong in the mainstream exit toolkit
Employee Ownership Trusts are gaining in popularity, with growing numbers of UK businesses transitioning each year. For advisers supporting founders through complex exit decisions, EOTs are now firmly part of the conversation.
Go EO spoke to Stewart Noakes, a business adviser and independent trustee who has worked with Employee Ownership Trusts for more than five years, to understand where EOTs genuinely work, where they don’t, and what advisers need to know when guiding clients through the option.
Which businesses suit an EOT?
Suitability comes down to culture. “EOTs work best in what I’d call ‘smart people companies’, businesses that genuinely value their people and want to see a future legacy built around them. I’ve seen engineering firms, recruitment businesses and professional services companies all transition to EOTs, but the common thread is that they care deeply about the people in the organisation.”
Stewart believes that when founders have already been thoughtful about how they treat their people, employee ownership tends to fit very naturally.
When is an EOT the wrong route?
You only get paid if the business performs. If the business isn’t profitable, you’re shooting yourself in the foot.
Stewart is careful to point out the warning signs of a business that may not be the right fit for an EOT.
Red flags include difficult cultures, organisations that don’t value employees, or places that have become overly autocratic. “Those environments don’t suit an EOT.”
There’s also a practical reality founders need to understand. “You can’t just cash out,” Stewart says. “You only get paid if the business performs. If the business isn’t profitable, you’re shooting yourself in the foot.”
EOTs are about legacy building
While tax efficiency often opens the door to EOT discussions, Stewart sees something deeper motivating many founders.
“Founders build companies around things they care about, and an EOT allows that vision to continue beyond them,” explains Stewart. “For some, especially those without a family successor, the business is their legacy.”
Transaction vs transition
One of the most significant differences between an EOT and a trade sale lies not in the transaction itself, but in what follows.
“A lot of the work after an EOT is about dialogue,” Stewart explains. “Being an EOT should mean talking openly about numbers; profits, revenues, where money is spent. For founders, that can feel uncomfortable, but it’s also where the real transition happens.”
This is where advisers can add real value. “It’s not just about signing documents. It’s about helping people get comfortable with a new way of communicating.”
EOTs vs trade sales
In many cases, you can complete the process in weeks, rather than months.
“A trade sale often delivers a bigger headline number, but the tax treatment is different,” he says. “The timelines for a trade sale can also be long: six, twelve, even twenty-four months; and much of the process is driven by the buyer.”
By contrast, an EOT allows founders to retain control over timing. “In many cases, you can complete the process in weeks, rather than months.”
That difference matters because it means less disruption, for the founder, the team, and the business.
Working with Go EO
“My experience of working with Go EO has been about efficiency,” Stewart says. “What Go EO does well is cut through the unnecessary layers.”
By streamlining the process, the timeline becomes clear. You know what’s been done, what’s left to do, and when you’ll get there.
“That certainty is hugely valuable, not just financially, but emotionally,” explains Stewart.
A credible option for advisers
For Stewart, employee ownership has earned its place in the exit landscape.
“As advisers, we’re increasingly focused on what happens after the deal,” he says. “Integration failures, cultural damage and short-termism are far more common than people like to admit. EOTs offer a way to plan for long-term health, not just a transaction.”
And that, he suggests, is why they belong firmly in the mainstream toolkit.