I founded Tomlinson Designs Limited (not many people know that’s what TDL stands for!) back in 2011, and I’m proud to announce that, as of September 2023, I have sold my 100% ownership of the business to an Employee Ownership Trust (EOT). This trust will act on behalf, and for the benefit of, the amazing team here at TDL. Instead of writing a bland, formal announcement, I wanted to explain the rationale behind the change and give our clients and network an insight into the journey so far.
What is an EOT?
Our friends at Harrison Clark Rickerbys have kindly provided the ‘legal speak’ version of what an EOT is:
“An employee ownership trust (EOT) is a form of employee trust offering indirect ownership of shares by employees. It is a collective vehicle which acquires a controlling interest in a company and then holds that interest for the long-term benefit of the company’s employees. EOTs were born out of a desire to increase employee ownership of UK businesses. Studies have consistently shown that employee-owned businesses perform better, demonstrating greater resilience, innovation, and profitability. Employees show greater commitment to, and engagement with, a business when they have a stake in it.”
Companies who have gone down the employee ownership route are varied; they include John Lewis, ARUP and Riverford Organic Farms.
Why has TDL moved to an EOT business structure?
My goal when starting TDL was simply designing great work for our clients. I didn’t have a master plan for growth and had certainly never considered any kind of exit strategy. Since 2011 we’ve been growing steadily and successfully navigating any challenges the world has thrown at us.
After moving out of London in 2017, I started passing more and more responsibilities over to the team, and when COVID hit in 2020 it was time for me to focus on family commitments and hand over the reins of TDL fully. Three years later the team have proven they can manage our clients’ projects, produce fantastic work, and build a great TDL culture; I knew they deserved to be rewarded for all this effort and dedication, but wasn’t sure how!
The penny finally dropped after a conversation with a family member at Christmas, where he explained his role on the board of an EOT. He mentioned that the business owner didn’t want to sell to another company, but he did want to hand over more ownership to his employees; I could see the similarities with TDL so started to delve a little deeper into these ‘EOTs’.
How does an EOT work?
Of course you know I love a diagram to explain things, so I’ve created one explaining the new EOT structure. I have sold my 100% share of TDL to the TDL EOT, and a Board of Directors of the Trust govern the EOT for the benefit of the employees.
Over the coming years, profits from TDL are used to pay off the debt to me as the seller, and can be shared across the team in bonuses, so it’s in everyone’s interest to pay off the seller as quickly as possible!
A key person is the Employee Representative, who ensures the whole TDL team are heard and empowered in important company decisions. Due to his knowledge of the company, and his great team ethos, it was a pleasure assigning Dave to this role.
“Being the Employee Representative on the Board of Directors of the Trust is going to be a rewarding and fascinating position. As a trustee Director, I have the unique opportunity to contribute to the success and growth of TDL whilst also advocating for my fellow employees. It’s my duty to ensure their voices are heard and their needs are met when decisions are made at EOT board level. I look forward to working alongside the other board members to make informed decisions that benefit the employees, the business, and TDL clients. This position will allow me to foster a sense of ownership and empowerment amongst the TDL employees, ultimately leading to a more engaged and motivated team.”
Dave Stroud, Head of Operations and Employee Representative to the EOT Board
How will the EOT benefit the TDL team?
The EOT model is a perfect fit for our ‘Purpose’ (taken from TDL’s business strategy):
“To support our team through their whole working life at TDL, enabling them to master their skills and providing them an environment where they feel valued, happy and fulfilled.”
EOTs are known to improve staff motivation, boost retention and foster strong workplace relationships, but luckily these have never been an issue for concern at TDL. The key benefit for us is the team feeling a real sense of ownership of the business they work so hard for, knowing all the effort benefits everyone as a whole. An EOT structure reassures both current staff and potential employees that TDL is a sustainable, long-term employer and a great place to work. In these times I believe empowerment and control of one’s destiny are key elements in attracting and retaining brilliant people.
It’s also worth mentioning the financial benefits too – the EOT can use profits from TDL to pay annual bonuses of up to £3,600 to employees free of income tax. Tax-free bonuses are always a good thing!
“When I started at TDL in 2014, I knew I’d found a company that shared the same values as me – challenging work, good causes, problem-solving, innovation and creativity. Over the years, Oliver and TDL have taught me a lot and I continue to learn new things every day. Having newly been appointed Creative Director, I look forward to working with Oliver to ensure that the team and any new staff have the same positive experience that I did. Together, we will inspire, support and enable the team to grow, and provide the award-winning service that our clients expect from us. The EOT marks an exciting new era for TDL. It’s clear that our greatest strength is our people. We’re a team – enthusiastic, creative and (as our clients tell us), great to work with. In my opinion, the EOT has two fundamental benefits for us. First, it ensures that our team is directly rewarded for their hard work. Secondly, it ensures that the future of TDL is guided and shaped by those who know and represent it best – our people. I am excited to see where this next chapter takes us.”
Craig Melvin, Creative Director
What does the EOT mean for our clients?
Our clients won’t see any changes in the day-to-day projects we’re designing, or the team working on them, but they will know that TDL has a proven model putting its employees interests at the heart of what we do. Thanks to the EOT, there’s now little chance of TDL being bought out and losing its great culture, so we will continue to be a sustainable and reliable partner, offering a market-leading design service.
What’s next?
Harrison Clark Rickerbys and Hazelwoods have been very helpful in setting everything up with HMRC and Companies House, so we are now officially an Employee Ownership Trust. Craig Melvin has been promoted to Creative Director and this sets the wheels in motion for me passing over company directorship to the team. Our newly assigned Board of Directors of the Trust are chomping at the bit to review our strategy and performance (I’m a little bit scared on this front!), and the team have been sending me some great questions which is a very good sign of things to come.
I’m staying at TDL as Managing Director for the time being. The MD role is the last part of the puzzle, and then I will be ready to hand over with a clear job description and sustainable business strategy.
For me, the EOT is a bit like a TDL rebirth. But this time round there’s a very clear goal; to hand over a growing company to the people who are responsible for its success, the people who make TDL great, the TDL team.
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