When business owners think about moving to an employee ownership trust (EOT), the first thing they often focus on is money. They look at profits, earnings, and what the business might be worth. Business valuation services for SMEs usually focus on clear financial data. But sometimes, numbers alone don’t give the full picture – especially when people are the driving force behind a business.
Many small and medium-sized companies in the UK rely on close-knit teams and strong relationships between staff. These things don’t show up in spreadsheets, but they matter. A company’s culture – the way people work together, support each other, and feel about their jobs – can have a big effect on the business’s future. That’s why culture needs to be part of the conversation during employee ownership trust valuations.
The Link Between Culture and Value
Most valuation methods look at how much a company might earn in the future. But those future profits come from the people doing the work. If your staff are happy, hard-working, and committed, your business is more likely to do well. When a business has a positive culture, its team tends to stay longer, work better, and help the company grow.
This kind of culture helps keep earnings strong over time. And because EOTs rely on long-term success, it makes sense to think about the people side of things – not just the money. Valuation experts who understand this will look at how likely the business is to keep doing well in the years ahead, not just how it looks today.
How to Show Culture in the Valuation Process
If you want your business’s culture to be part of the valuation, it’s helpful to show proof of what makes your workplace strong. This can be done in simple ways. You could carry out employee surveys to learn how your team feels about their jobs, how supported they are, and whether they see a future with your company. These surveys can help build a picture of what it’s like to work there.
Another thing to look at is how long people stay. If most of your team have been with you for many years, that shows they are happy and loyal. Valuers may also look at productivity – how much gets done in a day or how often tasks are completed on time. If your team works well together, these signs will show up in the results.
Even things like staff events, open communication, or chances for people to grow and move up can add to the story. These things all help to show that your company isn’t just a place of work – it’s a place where people want to be. And that can make the business more valuable in the long term.
What Happens If Culture Is Ignored?
If your business culture is not taken into account during a valuation, you could end up with a lower figure than your company deserves. This is especially true in businesses where knowledge, skill, and customer relationships are held by the employees.
For example, in service-based companies – like law firms, accountancy practices, or creative agencies – clients often return because of the people, not just the product. If the valuation overlooks this, the result might not reflect the real strength of the business. That could make the sale feel unfair to the owners and the team who helped build it.
It can also affect how well the EOT works after the sale. If employees feel ignored or unvalued during the process, they may be less willing to support the new structure. This could lead to lower performance in the future. So, leaving out culture can hurt the business even after the deal is done.
How Experts View Culture in EOT Valuations
More valuation experts now agree that a company’s culture is an important part of its success. Some use flexible ways to include these things in their work. They may ask to see staff surveys or look at employee records to understand how stable and skilled the team is.
Other valuers might speak with team members to get a better idea of how the company runs day–to–day. They also pay attention to staff turnover, training opportunities, and the general feel of the workplace. All these details help create a fuller picture of the business.
Still, not every valuer will automatically think to ask about culture. That’s why it’s up to business owners to bring it into the conversation. The more you can show with facts and examples, the easier it is to include these things in the final valuation.
Why Business Owners Should Act Now
If you are thinking about moving to an EOT, now is a good time to start looking at your company’s culture. Don’t wait until you’ve hired a valuer. Start by asking your staff how they feel about their work. You can also check how long people have stayed, how well teams work together, and how happy they are with the way the business is countryside run.
When you have a clearer idea of your culture, gather the information you need. This might include staff feedback, notes from team meetings, or reports on productivity. All of this can help valuers understand the real value of your business – not just in numbers, but in people.
It also prepares your team for the change. When employees feel like they are part of something important, they are more likely to support the shift to an EOT. This helps the business continue to succeed after the handover.
Final Thoughts
Employee ownership trust valuations should look at more than just money. A company’s value comes from its people as much as its profits. For small and medium-sized businesses, this is especially true. Outsourced finance services are changing, and culture is starting to play a bigger part.
If you want your business to be valued fairly, start by looking at your culture. Ask the right questions and gather the right proof. Then, work with valuers who understand that a strong team is one of the best signs of a strong future.
Call to Action
Before starting your EOT valuation, take time to look closely at your workplace culture. Find out what makes your team strong, and collect evidence that shows it. Then choose valuation experts who know how to include this important human element in their process. The better your culture is shown, the more accurate – and fair – your valuation will be.
