Could employee ownership be right for your family business?

From left: Joanna Booysen, Jeremy Gadd and Coralie Hooper – three of Telos JGA's insightful employee ownership team

Five million… That’s how many family businesses there are in the UK today, employing almost 14 million people between them.

These are big numbers, by any measure.

Yet equally big is the economic contribution they make and the community role many play – championed on 18 September by 2025's Family Business Day.

But what happens when it comes to succession planning if you’re a family business?

What if the next generation wants something different – and a trade sale or MBO doesn’t feel right?  

Transitioning to employee ownership (EO) is one option family businesses can explore.

Exploring employee ownership as a succession option

Widespread national media coverage of The Entertainer's transition to employee ownership included this piece in The Guardian online

The employee-owned sector is growing.

According to the latest figures – published in June 2025 by the White Rose Employee Ownership Centre and the eoa – there are now more than 2,470 employee-owned businesses around the country, with more than 358,000 employees.

Companies who have become employee-owned in the last 10 years range from household names Riverford Organics and Go Ape to eighth-generation family business Lodge Brothers, which JGA (now merged with Telos) supported to transition in January 2024.

Family-owned business The Entertainer became the latest big name to transition to employee ownership this summer.

As joint founder-owner Gary Grant said as he shared the news: ‘This is a significant decision for the family, and one we haven’t taken lightly, but it feels like the right time to transfer our entire shareholding into an employee ownership trust.’

So what is employee ownership? The UK government describes EO as when all employees have a 'significant and meaningful stake' in the company they work for – encompassing both a financial stake and a say in how it is run.

Ownership can take a variety of forms – from employees directly owning shares in the company, to having shares held on their behalf in an Employee Ownership Trust (EOT).

The EOT model is the most common in the UK.

Creating sustainable success for your family business

Telos JGA's Jeremy Gadd (left) and Alex Bloom enjoy supporting family businesses to transition successfully to EO

So why is employee ownership worth considering for your family business?

At Telos JGA, our team has a sound track record of supporting founder/owners and their businesses with the leadership, governance and employee engagement aspects of transitioning to EO.

We also work with existing EO businesses to embed and accelerate the commercial and cultural benefits of being employee-owned. Find out how we do that here.

‘Transitioning to employee ownership can safeguard the founder’s legacy while freeing the company to shape its own path,’ says our consultant Alex Bloom.

‘It puts the business into the hands of the people who know it best and who, hopefully, also care passionately about securing its sustainable success.

‘Becoming employee-owned is one way a family business can retain and strengthen its culture even when family members are no longer around.’

Empowering the next generation to lead

'With EO, it can be very empowering for the next generation... to understand there's a future for them, with the opportunity to contribute to the direction of the business they now own'

Having previously worked in and then led his own fourth-generation family business, Alex finds supporting others to explore EO – and achieve a smooth transition – particularly fulfilling.

‘I genuinely love it,’ he confirms.

‘I’ve seen the impact of succession through my own family business as it passed from my grandfather and his brother to the next generation.

‘I’ve seen how a family business can be evolved and strengthened as new generations come on board – and I’ve seen the impact when some family members aren’t motivated to be involved. I’ve also seen the benefit that non-family members can bring.

‘With employee ownership, it can be very empowering for the next generation (whether family or not) to understand there’s a future for them, with the opportunity to contribute to the direction of the business they now own.’

Commercially, employee-owned businesses have been shown to be more productive.

They also invest more in supporting employee health and wellbeing, on-the-job training and critical benefits like flexible working, according to the findings of the eoa’s Knowledge Programme in 2023.

Making the right decision for your family business

Telos JGA's Jeremy catches up with Birketts LLP's Marion Bennett (left) and Laura Gray at Family Business United's Great British Family Conference in March 2025

The benefits of employee ownership are useful to know, but EO won’t be right for every family business.

It takes time, energy and research to make such an important decision – and just as much focused effort to ensure the transition process runs smoothly for all involved.

So what should you do next if you’re a founder/owner who’s interested in employee ownership as a succession option?

1. Do your research – the eoa website is a good place to start, as is connecting with other employee-owned businesses to learn from any insight they can share.

   
   

2. Equip yourself with the facts so you're clear about what employee ownership is – and what it isn't. Read out short overview here.

   
   

3. Seek expert legal and financial advice on the transition process from a trusted professional with EO-specific experience – there are several out there with a sound track record of supporting family business clients, including Telos JGA’s trusted partners.

   
   

4. Get in touch with us to find out how Telos JGA’s experienced employee ownership team can prepare you and your business for a smooth transition – working with you to shape, embed and accelerate the benefits of being employee-owned. Read what we do here and contact us today.