For Heribert Trunk, the successful resolution of company successions in Upper Franconia is “the most important topic in the business world”. The President of the Upper Franconian Chamber of Industry and Commerce emphasised the increasingly urgent problem of unresolved company successions in Upper Franconia to the Nordbayrischen Kurier.

In the next five years, up to 3,000 companies in the region are up for succession, and in Bavaria as a whole, according to a Study up to 24,000 companies. Since 2009, the Successor Club of the Upper Franconian Chamber of Industry and Commerce has been taking care of the upcoming generation change in the region: more than 370 companies have been brought into new hands since then. In 2015, the Successor Club alone assisted with 110 company successions in Upper Franconia; currently 62 companies in the region are looking for a successor. However, in view of the rapidly increasing number of upcoming generational changes, the chamber and the successor club are increasingly reaching their limits.

62 company successions in Upper Franconia known to IHK

Trunk refers to the North Bavarian Courier This is due to the fact that in the predominantly small and medium-sized family businesses in Upper Franconia there are usually no financial investors willing to continue the business. These companies ?will more or less diffuse. We want to avoid that.

In addition, there is always the danger that a generational change process will fail. The causes are manifold: these can be too high price expectations of the company owners, a failure of the financing of the acquirer or the increasing lack of interest of entrepreneurial children in the family-internal company takeover.

Very often business successions fail due to insufficient preparation or poor management of the generational change. Both are then often accompanied by legal and tax problems. Such problems increase the likelihood of expensive delays or even the failure of a business succession.

This danger can be reduced by good preparation of a company succession. An experienced advisor specialised in company transfers can help with the planning and preparation of the succession. KERN’s partners who specialise in generational change emphasise that a well-done company exposé and a company valuation are important success factors for a succession. In the course of preparing a company exposé and a company valuation, an entrepreneur becomes very intensively involved with his or her company. In this way, he optimally prepares himself for the discussions with potential buyers and their critical questions.

Financing a business succession easier than when it was founded

And it doesn’t have to fail because of the financing either. Klaus-Jürgen Scherr, head of Sparkasse Kulmbach-Kronach, also points out to the Nordbayrischen Kurier that the risk assessment of a company with a business model that has been tried and tested over many years is easier than for a greenfield start-up.

A good business plan is also the linchpin of the financing concept in business succession. A well-made business plan builds on the transferor’s business valuation and constructs a coherent and realistic future scenario. A business successor is well advised to address both the opportunities and the risks of the planned generational change.