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Employee Owned Trust (EOT) Readiness Test

Thinking about an Employee Ownership Trust (EOT) for your business?

This Readiness Test will help you explore your suitability for an EOT by asking a series of focused questions. Each section looks at a key factor such as leadership succession, employee impact and core valuation considerations.

At the end, you’ll receive an immediate outcome (Not Fit, Potential Fit, Likely Fit, or Strong Fit) based on your answers. The results are for guidance only and provide a helpful starting point for a deeper conversation with our team about your options.

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1. Ownership & Control - Step 1 of 8

1. Ownership & Control

1. Are you willing to sell a majority (over 50%) of your shares to an Employee Ownership Trust? *

2. Is the current majority shareholder a UK tax resident (at least at the time the EOT completes)? *

2. Trading Status & Eligibility

3. Is your company a trading business (not mainly an investment or property holding company)? *

3. Financial & Strategic Readiness

4. Does your company have a history of making profits and generating cash? *

5. Does your company have a level of surplus cash on the balance sheet that could fund an initial day 1 EOT payment? *

6. Are you confident you will continue generating sufficient profit and cash flows over the next few years to repay the seller’s deferred consideration, as well as any additional financing and business growth costs? *

4. Leadership, Legacy & Continuity

7. Do you want to reward your employees by giving your business to them via an EOT and secure the legacy and culture of your organisation going forward? *

8. Is there a leadership team in place (or developing) who could take on day-to-day management, with your mentoring? *

9. Can you foresee being able to remove yourself from the business over the next few years? *

10. Have you thought about what you’d like to do once you are no longer largely involved in the business, and are you optimistic you can bring yourself to leave at some point in the future? *

5. Employee Readiness & Stakeholder Alignment

11. Is your workforce of a scale where shared ownership is meaningful (e.g., more than 10–15 employees)? *

12. Employees under an EOT consider themselves as co-owners, which research by the Employee Ownership Association shows can increase productivity. Are you willing to encourage employee-led ideas and foster a culture of transparency and trust? *

6. Valuation, Funding & Tax Structure

13. Are you committed to commissioning an independent valuation of your business as the basis for a deal structure that is both attractive to sellers and to employees? *

14. Would you be satisfied with receiving only a portion of the deal value in cash on day 1 (limited to available surplus cash / property), with the rest paid to you as deferred consideration over several years, depending on company performance? *

16. Would you consider retaining a minority equity stake (rather than sell all your shares), if this was a more suitable approach? *

7. Motivation & Governance

17. Are you prepared to establish an independent EOT Board (led by a Non-Executive Chairperson) that is separate from your Company Board, and is consulted on material issues affecting employees (like future potential sale, taking on debt, making acquisitions etc?) *

18. Are you confident that a sale to an EOT has advantages for you or the business, compared to a more conventional sale to a trade or financial buyer? *

About you

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I consent to Initium Corporate Finance storing and processing my information submitted in this form so that they can provide me with an EOT readiness assessment and follow up with relevant information.

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