As the economic development agency Kreis Kleve announced in a recent article in the WAZ, around 750 businesses are looking for a business successor in the district of Kleve by 2018.

This figure on the situation of the company makes the significance of the nationwide figures determined by KfW Research for the first time in 2015 on the basis of a representative KfW SME Panel very clear. By 2017, the heads of several 100,000 SMEs in Germany are planning to hand over or sell the business to a successor. That is about one in six SMEs in Germany. This means that about 4 million jobs depend on the success of these company successions. The number of upcoming generational changes in the Kleve district shows the challenge facing regional business promoters throughout the Federal Republic.

The complexity of a company succession is often underestimated

Many business owners underestimate the often very complex and long-term process of company succession. But: “Only those who initiate the succession process in good time and, if necessary, involve trusted experts, ultimately create the prerequisites for securing the continuity of the company,” says Norbert Wilder from the Economic Development Agency to the WAZ.

Even if there are family-internal company successors, a family-internal handover cannot always be carried out smoothly. Unresolved conflicts often have to be resolved first. Here it very often depends on the skill of an experienced business mediator to bring the successor generation and the transferors together. The will to hand over is one side of the coin, letting go after the handover is the other.

If there are no successors within the family, the first question to ask is: How is my company positioned? Is it fit for the future? Have all the necessary investments for a successful future been made or are they at least being planned and can be financed? Are there clear structures and clearly defined operating procedures? Are the figures in order?

Clarification processes need time

If you can answer these questions in the affirmative, the next question is: To whom can I entrust my life’s work? How do I find suitable candidates? Should I approach competitors directly? How can I prevent my business data and other trade secrets from falling into the wrong hands?

It quickly becomes clear that finding a suitable successor, as well as the entire process until a purchase agreement is actually ready to be signed, is very complex. There are also many legal and tax questions to be answered.

Klaus-Christian Knuffmann, a management consultant from Krefeld who specialises in business succession in small and medium-sized enterprises, points out that the preparations for a company sale differ significantly from those for a family-internal generation change. Very often entrepreneurs underestimate the clarification effort and do not start to plan the succession concretely until it is too late.

Knuffmann emphasises: “Anyone who wants to avoid unpleasant and expensive surprises in succession planning should in any case seek professional advice for this process, which often takes up to 2 years”.