It is easy to focus on the views and ideas of people we agree with and write off the ideas coming from those whose views we dislike. My blog today concerns a chap called John Elliot who according to this report holds views on the EU that are not ones I hold and on the introduction of the minimum wage he opposed it and I supported it. However that does not make him less of a giant in my eyes in terms of one of the fundamental decisions he has made with the business he runs. He is the owner of Ebac a company he started in 1972 when he was 29 which made Industrial Dehumidifiers. The business has grown although it is not huge in turnover terms. It generates £15M each year yet from that achieves £3M profit which is an amazing figure to create from such a relatively small turnover. However Mr Elliot is someone who as he nears retirement is not going to sell the business or even pass it on to his children, but instead in 2012 he transferred ownership of the business to the Ebac Foundation which is a legal entity which ensures that the business cannot be sold and that there are no shareholders demanding their pound of flesh. Instead the foundation has four objectives:
Growth – that the business should trade and develop
Investment – that the profits are reinvested into the business
People – that the business creates new jobs and allows the employees to fulfill their potential
Community – that the business plays an active part in the community where it is based.
One of the most common models of modern business is for entrepreneurs to create a going concern and then ensure that it is as profitable as possible before selling it on. The next owners come along and squeeze even more profit out and perhaps break it up or develop it still further. One of the most common ways of improving profits is to reduce wages and demand more from the employees so that the business grows at the expense of the workers who in due course are dispensed with when a future owner decides that is the best strategy. So much of John Elliot’s practice challenges most ways of running a modern business and he is to be commended for this. We need more businesses to adopt this approach whatever the outcome of the EU negotiations.