The fast track guide to setting up an employee share scheme
Setting up a company share scheme is one of the best things you can do to create a successful business.
When team members own a slice of the action their whole mindset changes. They start to think about what’s over the horizon, and what that might mean for them in the long run.
For the majority of SMEs, hiring and retaining brilliant people is probably the single biggest opportunity and challenge. Your success may very well depend on it. Get it right and you are likely to build a robust business. Get it wrong and it will seriously hinder your chances, or worse.
If everybody is incentivised to perform then you’re going to increase employee productivity and happiness. Happy employees who care about your business and your customers will create the kind of company culture that attracts other brilliant people.
You probably know all of this already and don’t need to be sold on the benefits. But you might like to take pain out of the process of setting things up, which can be convoluted and cumbersome.
Honestly, just thinking about this kind of thing gives most people a headache. It’s perfectly normal to recoil from undertaking administrative work that needs to adhere to HMRC rules. Run to the hills!
Make it easy on yourself
Unfortunately, it’s true that setting up a share scheme can be an incredibly complicated affair. There’s a lot that business owners need to think about. It can be all too much to take in, and the day job often gets in the way of making something happen.
You’ll have plenty of questions, and finding the right kind of answers feels like a lot of hard work. It doesn’t have to be that way though.
In reality, there are only a few types of share schemes that tend to be appropriate for SMEs. Once you understand what these are, it becomes a lot more straightforward.
It’s then a case of figuring out how best to protect the business. The good news is that this is relatively easy. You can set conditions for recipients, such as achieving milestones, or staying with the company for an agreed period of time. There is no bad news.
It is also key to understand how to be tax efficient, as some share schemes are good for the taxman, while others are much better for employees.
We’ve done two things to help you out
Firstly, we compiled a fat-free guide to setting up a company share scheme. It is specifically aimed at SMEs and takes just 10 minutes to read. It is written in plain English and I guarantee that it will answer most of your questions. We’ll answer any others you might have for free after you’ve read it.
Secondly, we built Vestd, which is platform of choice for UK SMEs issuing shares and options. It is super easy to use and is seriously cost effective. SMEs absolutely love it, and we hope you’ll give it a try when the time is right.
I hope the guide proves helpful as you research the ins and outs of setting up your share scheme. I’d certainly love to hear any feedback.