Succession: a path for the future

By Lisa Mottershead, operations director, Force 8.

An article by Cyncly’s sales manager, Greg Beachim, recently highlighted the importance of succession planning for fabricators, a crucial topic as many in the industry approach the end of their careers.

While selling the business to a larger company and retiring might seem like the easiest option, this often comes at a cost. Typically, the sale is to a larger fabricator, who may absorb the order book and client list, retaining only some staff to handle the extra work.

Larger fabricators, working with tighter margins, often prefer to keep operations lean. In cases where the business specialises in a particular area, the specialised staff and skills may be retained, but for many veteran fabricators, the idea of closing up shop can feel inevitable. This is underscored by the increasing number of used machinery listings from companies that have shut down.

As the industry grapples with a shortage of skilled workers, the need to start planning for succession is urgent. Without proper planning, the future may be dominated by a few large fabricators focused on high-volume, low-margin production – a trend that has long plagued the sector.

Force 8 has already faced this issue head-on. Specialising in profile bending and manufacturing composite doors, we have cornered a niche market that larger fabricators overlook, as it requires both time and skill but is highly profitable.

Dennis Sumner, having worked with his late father to establish and grow the company, felt a strong connection to both the business and its employees. The thought of selling and potentially seeing the business fragmented, bending to one buyer, door manufacture to another, and our installation team scattered, was unthinkable.

It took years to assemble a team with the specialised skills required for both divisions, and their ability to collaborate on complex projects, such as arched doors and complex shapes.

To say that Force 8 is unique within the market would be an understatement, so it needed a unique solution for the future of the company and most importantly the staff. After many months of research with our accountants, Dennis came to the conclusion that the Employees Owned Trust (EOT) was the solution.

An EOT is one where 51% or over of the shares are in a trust for the benefit of all employees, in our case Dennis decided that the full 100% of the shares should be within the scheme. The trust, which oversees the management of the company, includes shop floor representative and one non-working independent person. The trustee board must meet certain legal requirements and ensure that the company is always acting in the best interest of all the employees. Alongside this, a Forum is made up from staff and directors with the aim of improving the company and discussing new ideas.

Every eligible staff member, having been employed over 12 months, can also receive a tax-free amount of up to £3,600 within the fiscal year. The team has embraced this model and appreciated the tangible rewards of the company’s success and the recognition that comes with it.

It’s been three years now since the introduction of the EOT, in that time it has completely transformed company dynamics, fostering a strong sense of team spirit throughout the workforce. Now, every employee takes ownership of quality control, ensuring that each product is flawless and delivered punctually.

Force 8 now runs like clockwork and allowed us to innovate even more new products with the help of the entire team. As mentioned before, our industry is facing a skills shortage, the EOT as a by-product of the scheme, also helps to retain vital skills within the business as they are part of it.

This path may not suit every company, but I highly recommend considering it before deciding to sell out or shut down entirely. Planning for the future is an important element of running a business, opting for the EOT was among the best choices we made, our only regret is not making it sooner.