Why Business Owners Are Rethinking Ownership
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Read time: 6.41 minutes.
Read this on: jeanmoncrieff.com
What's in store for today:
- Who owns your business after you?
- Don't grow broke
- Moonshot thinking
Hey {{first_name}},
What if your business could outlast youâwithout selling to private equity or a competitor?
This week, I sat down with Peter Koehler, founder of Lumo Group, to explore an alternative path: Employee Ownership Trusts (EOTs) and Perpetual Purpose Trusts (PPTs).
Peter has helped companies transition ownership in ways that protect their mission, secure employeesâ futures, and ensure long-term independence.
As Peter puts it:
âIf you donât design your ownership transition, someone else will do it for you.â
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In this episode, we cover:
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Why more business owners are choosing trust-based ownership instead of traditional exits.
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The key differences between ESOPs, EOTs, and PPTsâand which one fits your business.
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How to fund an ownership transition without selling out or losing control.
đ§ Listen to the full conversation on The Freedom Experience:
Apple Podcasts | Spotify
2. Who Owns Your Business After You?
Youâve spent yearsâmaybe even decadesâbuilding your business. But when itâs time to step away, whatâs next?
Many business owners assume they have two options: sell to private equity (and risk their company being flipped for profit) or find a strategic buyer (who may strip the business for parts).
But there are alternative optionsâones that keep your business independent, take care of your employees, and protect your mission for the long haul.
In my conversation with Peter, we explored Employee Ownership Trusts (EOTs) and Perpetual Purpose Trusts (PPTs)âalternative ownership models that let you step away on your terms, keeping your business independent, your employees secure, and your mission intact.
Hereâs what stood out:
1ď¸âŁ Venture Capital and Private Equity Arenât Always the Best Fit
Peterâs journey into alternative ownership models started with a harsh lesson: outside capital often comes with strings attached.
In a previous venture, his team raised money from investors who had one goalâgrowth at all costs. Their expectations clashed with the companyâs mission, forcing decisions that diluted ownership, drained resources, and ultimately led to failure.
That experience sparked his interest in business models that align financial sustainability with long-term independence.
His takeaway?
Know what youâre signing up for. Money isnât just moneyâit dictates who controls your business.
2ď¸âŁ Employee Ownership Trusts vs. ESOPsâWhatâs the Difference?
Employee ownership is gaining traction, but not all models are the same. Peter broke down the distinctions:
- ESOP (Employee Stock Ownership Plan) â Employees own shares, but the company must prioritize maximizing share value. This can lead to decisions that put profit over mission.
- EOT (Employee Ownership Trust) â The business is owned by a trust, which exists solely to benefit employeesâwithout the pressure to sell or maximize share price.
- PPT (Perpetual Purpose Trust) â A broader version of an EOT, designed to safeguard a companyâs independence and long-term mission.
One key distinction?
An ESOPâs fiduciary duty is to financial returns, while an EOT prioritizes people and purpose.
This means an ESOP could be forced to accept a buyout if it increases share value, whereas an EOT ensures the business remains independent for the long haul.
3ď¸âŁ Designing an Ownership Transition That Matches Your Goals
Every business transition involves more than just selling shares. As Peter pointed out, itâs really five transitions happening at once:
- Ownership â Who will legally own the business?
- Financial â How will the transaction be funded? (Self-financing? Outside debt?)
- Legal â Will the business structure change (e.g., from an S-Corp to a C-Corp)?
- Cultural â How will employees be prepared for this shift?
- Leadership â Who will lead once the founder steps back?
Without a clear plan, a trust structure alone wonât save a business from poor leadership or financial mismanagement.
4ď¸âŁ Funding an Ownership TransitionâItâs More Doable Than You Think
One of the biggest myths about employee ownership transitions is that they require huge sums of money upfront.
In reality, most transitions are self-financed, where the owner is paid out over time through company cash flow. Other businesses take a hybrid approach, securing a mix of seller financing and external debt.
Peterâs key takeaway: Owners who plan ahead can structure a transition that works financially while ensuring business continuity.
5ď¸âŁ The Future of Business OwnershipâWhy This Model Is Gaining Traction
With millions of business owners over 55 considering their succession options, trust-based ownership is becoming an attractive alternative.
More founders are realizing:
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Private equity isnât always the best steward of their legacy.
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Employees value profit-sharing and long-term security over short-term equity gains.
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Trust ownership ensures the business stays independent and purpose-driven.
As automation and AI reshape industries, businesses that prioritize their people and values will become magnets for top talent.
Final Thought: The way you exit your business defines its future. Make it count.
What do you thinkâcould trust-based ownership work for your business? Hit reply and let me know.
2. Don't Grow Broke
If thereâs one book I wish I had earlier in my entrepreneurial journey, itâs The Sixty Minute CFO by Tracy Bech and David Duryee.
Itâs one of the books Iâm recommending to clients right now because it cuts through the noise and gets straight to the heart of what business owners need to know about financial health.
Tracy breaks down key financial ratios that determine whether a business is truly healthyânot just growing on the surface. She also dives into growth itself, explaining how to fuel it properly and avoid the traps that leave businesses stretched too thin.
But hereâs what really grabbed me: less than 5% of business owners take the time to plan.
That stat stuck with me. So many founders pour everything into running their business but never stop to build a financial strategy that ensures long-term success.
Itâs a great read, and Iâm excited to share that Tracy is coming on the podcast in the coming weeks to go deeper into these concepts.
Stay tuned!
3. Moonshot Thinking
I stumbled upon this gleaming astronaut statue while exploring the quiet streets of Vaduzâand it turns out itâs a tribute to Liechtensteinâs little-known but pivotal role in the Apollo missions!
As a fun bit of trivia, the Liechtenstein flag was carried on Apollo 11 in 1969 (and again on Apollo 17) to honor local company Balzers AG, whose revolutionary vacuum technology helped protect the lunar modules from dangerous cosmic rays.
Standing before this interplanetary figure in Vaduz reminded me that massive achievementsâlike putting a person on the moonâare rarely the work of a single hero. It takes a global network of dreamers, doers, and supporters, all striving for that shared vision.
If youâre a business owner feeling stuck, take a lesson from NASAâs playbook: sometimes, you must collaborate beyond your four walls to accomplish something extraordinary.
Yet no bold objective ever starts without a moment of quiet reflectionâjust you, a mirror (or a golden visor), and a grand vision that stretches over the horizon.
Thatâs where ten-year thinking enters.
Like setting a trajectory for space travel, mapping out the next decade requires you to fix your sights on something big, chart the smaller course corrections along the way, and gather the right people to help you get there.
If you give yourself permission to occasionally step back from the hustle and think deeply about where you want your business to go, youâll find a renewed drive to reach your âmoonshotâ goals.
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Just look at SpaceX: theyâve encountered countless rocket explosions and landing mishaps along the way, yet they keep refining their approach and pushing forward without ever giving up.
Remember, small innovations can fuel giant leaps, and every improbable dream begins as a curious spark in someoneâs mind.
Whether youâre revolutionizing an industry or just looking to reignite the momentum in your business, draw inspiration from that lunar visor: reflect on your dreams, refine your strategy, and shoot for the starsâbecause you might just land on the moon.
Foundation for Business Growth Workshops
If youâre ready to go beyond the chaos and implement a system to propel your business forward, join a Foundation for Business Growth Workshop.
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One quote to start the week strong
âIf you don't design your ownership transition, someone else will do it for you.â
â Peter Koehler
If you donât plan your ownership transition, someone else will do it for youâand not on your terms.
Whether itâs a rushed sale, a takeover, or decisions made under pressure, the outcome wonât reflect your vision.
A well-planned transition gives you control, protects your team, and ensures your business thrives beyond you.
Donât leave it to chance.
Have a great week!
- Jean
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