Australian Employee Buyout Centre – Social Value Proposition for Employee Buyouts

The following was designed as part of the Australian Employee Buy Out Centre’s strategic plan to give guidance to the “social value” that employee buyouts can create for local communities when such activity is targeted at job rescues/job creation (usually as part of a community economic development strategy). It is reproduced to assist communities considering such activity at any location.

What is in it for the Employees?

  • Greater job security and a fairer share of enterprise prosperity they help create.
  • Personal satisfaction in working in a business they own.
  • The opportunity to be a co-owner of the business and to be fully involved in the business.
  • To influence their own destiny.
  • A source of savings far into the future

What is in it for the original Business Owners & Shareholders?

  • A source of savings far into the future
  • Provide them with a way to extract value from selling their business.
  • Access a better proposition than closure of the business where they will lose money and the employees their jobs.
  • There will also be owners who for altruistic reasons see value in selling to employees – the people who built the business.
  • Obtain access to:
  • Expertise that can be easily leveraged.
  • Access to sources of funding
  • A group of highly skilled and passionate people that believe in employee ownership and empowerment.
  • Engaged and efficient employees.
  • A better risk/reward ratio.

What is the value for the Community in an Employee Buyout?

  • Retain local employment.
  • Retain local businesses.
  • Retain expenditure in the local area.
  • An opportunity to actively participate in local economic development.

What is in it for the Financial Providers?

  • Access to alternative asset classes/types of businesses.
  • A fair return on investment.
  • An investment with a “feel good” factor.

What is in it for the Government?

  • More prosperous businesses and more jobs.
  • An ability to promote Government action in the community.
  • Government at all levels will be able to spend less on the provision of support – unemployment benefits, GEERS, counselling etc.
  • Save taxpayers money by avoiding insolvency.
  • An alternative solution to the conventional insolvency model.

What is in it for the Creditors?

  • A better outcome than liquidation.
  • Retain an ongoing customer

 

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