Company succession by female entrepreneurs was the focus of our three-part workshop series. We spoke to a KERN partner about her experiences and results on the occasion of her workshop ‘WOMAN.BUYS.BUSINESS’ in Cologne.
Company succession as a real career and life option
Her workshop dealt with the learnings of female successors. It was aimed at all women and daughters who see business succession as a real career and life option. It also offered them the opportunity to exchange ideas with like-minded people. What was the composition of your group of participants?
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Company acquisition (M&A) - independence or strategy for growth
The participants came from a wide variety of backgrounds: First of all, interim managers and executives who were on their way to self-employment and entrepreneurs who wanted to grow through a strategic acquisition. In addition, there was a bank consultant from private banking, a consultant for company pension schemes and a coach. In other words, all of them were a colourful mix that offered excellent opportunities to “think outside the box” due to the multitude of different professional experiences.
Among my most important learnings from this workshop are:
1. interest in know-how for the acquisition of companies continues to grow
The participants were focused and very interested in the workshop. One focus quickly emerged from the extensive agenda: the holistic view of the company acquisition. But also the general process, possible stumbling blocks, the company valuation as well as the financing options, especially in the case of partial acquisitions or the involvement of capital for the growth strategy, were very much sought-after information.
2. women learn and benefit from each other - this pays for effectiveness
The topic of company acquisition alone offers plenty of material for a workshop series lasting several days. On the one hand, we looked at the emotional and internal factors involved in buying a company, and on the other hand, the hard facts. The workshop offered an open exchange both in the personal motives and in the explanations of the purchase process on the part of the participants. This resulted in a very successful and fruitful event. It proves true time and again: women like to exchange ideas and want to benefit and learn from each other. They tend to be less competitive, but more willing to collaborate. We were a colourful mix. This meant that there was something for everyone and everyone could benefit from the different perspectives on the topic - including networking. Accordingly, some learnings from successors could be exchanged. So it is not surprising that the first participants already suggested another workshop with the topic: “From company value to purchase price”.
My recommendations for successors
First: Clarify comprehensively and honestly the question of your personal ‘why’.
Buying a company is not the goal, but a means to an end. Your motivation must therefore be great enough to be able to face possible problems with confidence at any time. There are many reasons for buying a company: monetary, the desire to be able to shape something independently and creatively, to be able to act independently of higher hierarchies. Or is it your dream of having your own life’s work? The answer to your individual “why” must be strong enough to motivate you from the idea of “buying a company” through the process to full implementation and far beyond, and to defy resistance.
Secondly, create clarity within your family - what are their views on your project?
Assuming there is a family - do they support your plans, how do they feel about the opportunities and risks involved? What securities do you have to give? How can private assets be preserved for your family in the event of failure? Are you the sole breadwinner and is your family dependent on your regular income? You may have to accept time restrictions in living together with your family, at least temporarily. Are you prepared to do this yourself?
Thirdly, make an inventory of your finances and own resources.
How much equity can you bring into the project? Before you even buy a business, you already have costs ? such as tax advisors, M&A advisors, financing advisors, etc. Even if it is initially only time that you have to invest, this also causes opportunity costs. When financing the purchase price, you have to show equity capital. And here the rule of thumb applies: the higher the share of the total price, the higher the bank’s willingness to grant you financing.
These are only three important recommendations for the preparation of a successful company purchase. All these considerations should be thought through in advance. Irrespective of this, we at KERN ? Die Nachfolgespezialisten recommend involving an external advisor with transaction and industry experience in your takeover process. If only to avoid costly mistakes. This has also been shown by the learnings of successors.
You can find out how to avoid risks when buying a company in our free webinar on buying a business without risk. Secure your place now!
Tips for further reading:
Company succession is female
Using the valuable experience of women entrepreneurs in the succession process
KERN Corporate Succession Hamburg Nicole Kalonda
KERN promotes business succession by women
Integration management - the key to success
Interview: Preparing the succession within the family well
The workshop brought together women from a wide range of contexts. This allowed them to share their diverse perspectives on different aspects of business succession. The main focus was on the holistic view of the acquisition of a company.
The workshop shows: Women are increasingly interested in know-how on buying a company. The interested women have the most diverse backgrounds. Moreover, they learn from and with each other. This increases their own effectiveness.
1. they should clarify their why. This is the only way they can overcome obstacles in the succession process.
2. obtain the support of the family for the business succession project. In addition to the time involved, financial aspects also play a role here. After all, the family should not be exclusively dependent on the succession. 3. draw up a list of finances and own resources. Costs are incurred even before the company is bought. And: the higher the share of equity capital, the better the chances of obtaining financing.
