TaxAssist Accountants – Our EO Story: Testing EO governance prior to transition
TaxAssist Accountants is an international franchise network of accountancy practices serving local businesses and individuals with a variety of services from prominent high street shops.
David and Julia Forrester built their practice in Ilkley, Keighley and Bingley in West Yorkshire to become one of the larger franchisees in the network, employing 13 staff and supporting over 1,000 clients.
The founders always had an exit plan in mind to sell when the business value had reached certain targets, however when that point in time was reached, they had second thoughts and looked at exploring alternative options that would allow them to crystallise the goodwill built whilst still being actively engaged and employed by the business for the foreseeable future.
Employee ownership seemed not only a viable alternative to a trade sale but also a more palatable one for the founders, employees and clients.
David explains: “We had become excited about the change to employee owned then the pandemic came and we hit pause! This was the biggest test our business had ever had with the changes coming seemingly daily and the distress our clients were experiencing leading to as significant increase in workload and pressure for our team.
“We had to be strong. Furlough was not an option – our clients needed support and I am proud to say the employees all came together and delivered. We needed support ourselves at times of course, with some staff struggling with the changes enforced through lockdown. I was astounded by the resilience of the team during those challenging months.”
Planning our business openly with staff
He added: “We came back to the plan in March 2021 and modelled how the transition could work. We had an idea in mind where we would ‘prove’ the viability of being employee owned by making some internal changes in our management and owners’ remuneration first.
“Planning our business openly with staff we introduced monthly reporting of the business performance through an automated dashboard linked to our own accounts system. Being open about our results saw an immediate impact across the business as staff celebrated and encouraged our growth.
“Our head office colleagues were initially wary of the idea as we had expected, however as we articulated our plan they became more inquisitive and ultimately supportive. As the franchisor business is majority owned by franchisees, a first in the franchise business, our plans resonated and aligned to a process they had untaken themselves in becoming franchisee owned a few years before.
“We also started the process of running employee-led quarterly reviews with support from a contact from outside our business that enabled us to develop our future trustee framework and further engage our broader team in what employee ownership might look like.”
So, what was the outcome? Here’s the reality of the test year to March 2022
- Year-on-year (YOY) turnover growth 15%
- YOY profit growth 31%
- Staff retention 93%
- Client retention 95% (against a sector average of 90%)
The most important result is happy founders, staff and clients!
As Covid made the employees more resilient, ownership following this makes them more engaged and optimistic. As of May 5, 2022 their TaxAssist Accountants business is now 100% employee owned, has a solid trustee board in place and is ready for the next exciting chapter of development.