When the time comes to think about stepping back from your business, you want the transition to make sense — not just for you, but for the people who’ve helped build it. That’s why more SME owners are considering Employee Ownership Trusts (EOTs) as a way to hand over control while keeping the company stable.
Now, on paper, EOTs look fairly straightforward. Sell your business to a trust, let your employees benefit, and perhaps enjoy some tax relief in the process. But the reality is more complex than that. There’s valuation to consider, cash flow to plan, legal advice to take — and that’s before you even get into the question of how your team will manage things going forward.
This is exactly where part time CFO services prove invaluable. Not just a number-cruncher, but a steady hand to guide the process and help keep things on track.
What Is an Employee Ownership Trust, Anyway?
Let’s start with the basics. An Employee Ownership Trust is a type of legal structure that allows a business to become owned — not by one buyer, or a private investor — but by its employees, through a trust.
In most cases, the trust buys a controlling share (over 50%) from the owner, and the business repays this over time from future profits. The staff don’t need to dip into their own pockets. The trust holds the shares for them, and profits can be shared out once the debt to the seller is cleared.
So why do owners choose this route? For some, it’s about legacy. Others prefer it to selling to a competitor or large corporation. And, of course, there are tax benefits — under the right conditions, you won’t pay Capital Gains Tax on the sale. That’s not a small detail.
Still, as attractive as it may sound, setting up an EOT isn’t something you want to rush into. There are plenty of moving parts, and more than a few financial decisions that need to be made carefully.
Why the Valuation Isn’t Just About Numbers
Here’s something that trips up a lot of business owners: the employee ownership trust valuation. It’s natural to think, “I know what my business is worth.” But when it comes to EOTs, it’s not just about what the market might pay — it’s about what the business itself can afford to pay back.
That means looking at your profits, yes, but also your cash flow, future prospects, debt levels, and even things like market trends and customer retention. You can’t just slap a price tag on it based on last year’s turnover.
And what happens if you get it wrong? Well, if the price is too high, the trust may struggle to repay you. Too low, and you might not get fair value for the years you’ve put into building your company.
Getting this balance right is where the steady guidance of a part time CFO really starts to shine.
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What Does a Part Time CFO Actually Do in an EOT Process?
At this stage, you might be wondering — do I really need a CFO, even part time, for this? The answer is: probably yes. Not because you can’t understand your business (you obviously do), but because an outside expert gives you objectivity, structure, and time-tested knowledge.
Here’s what they actually bring to the table:
1. They get your books “valuation ready”
It’s surprising how many businesses have gaps in their reporting. A CFO can go through your financials, tidy things up, and make sure everything is presented clearly and correctly. That alone can avoid delays or valuation disputes.
2. They stress-test the numbers
Can your business realistically repay the trust in five years? Seven? A CFO can model different scenarios, see how robust your forecast is, and help avoid surprises.
3. They coordinate with your advisers
You’ll likely have solicitors, tax experts, and trustees involved. Your CFO can be the point of contact who ensures everyone’s working with the same numbers — and the same understanding.
4. They plan for the future
Post-sale, you still want the business to thrive. A CFO can help set up budgets, reporting systems, and financial plans that suit the new structure.
Avoiding the Common Mistakes
Plenty of businesses go through EOT transitions each year, and while many succeed, some struggle — not because the idea was wrong, but because the planning was weak.
Here are a few traps a part time CFO can help you steer clear of:
- Overvaluing the business: Emotional attachment leads some owners to ask for more than the company can support. A CFO brings realism and market awareness.
- Underestimating cash flow needs: Profit doesn’t always equal available cash. A CFO will make sure you’ve accounted for timing, debt repayments, and unforeseen costs.
- Missing deadlines or key documents: A CFO keeps things moving. They know when you need what, and from whom.
- Overlooking post-sale support: Once the sale is done, the business still needs financial leadership — especially when employees are adjusting to the new structure.
When Should You Bring a CFO on Board?
There’s no fixed rule, but earlier is better. Ideally, you’ll want to start talking to a part time CFO once the idea of an EOT becomes serious — well before you’re signing anything.
Why? Because getting ahead of potential issues can save time and money. Cleaning up accounts, forecasting properly, and planning your payment terms takes time. A CFO who’s involved from the start can help you avoid having to redo work or make last-minute changes under pressure.
Thinking Beyond the Sale
Let’s not forget — selling to an EOT doesn’t mean walking away. Often, owners stay on for a few years as part of a managed handover. And the business itself now has a different structure, with trustees and employees taking on more responsibility.
A part time CFO can play a long-term role here. They can help train internal staff, build simple financial reports, and set up frameworks that support employee engagement and understanding. In short, they help you leave the business in better shape than you found it — even if you were the one who built it.
Final Thoughts
Choosing to sell your business to an Employee Ownership Trust is a bold, thoughtful move. It shows you care about the future — not just your own, but that of your employees and your company’s legacy.
But make no mistake: it’s also a big decision, one that requires proper planning and the right people in your corner. A part time CFO offers exactly that — experience, strategy, and peace of mind without the overhead of a full-time hire.
If you’re even slightly considering the EOT route, it’s worth having a quiet conversation with a CFO now. Not when the paperwork’s already on the table — but while you still have time to shape the outcome properly.
