North Rhine-Westphalia is facing a major challenge in the succession situation in companies. This is the result of a study by the Chambers of Industry and Commerce in NRW published in October 2016. The study was conducted in cooperation with Prof. Dr. Frank Wallau of the Paderborn/Bielefeld University of Applied Sciences and in part provides cause for concern for the economic situation in North Rhine-Westphalia.

If you look at the figures, you will see that especially small companies with less than 20 employees take the topic of company succession seriously only at a very late stage. The complexity of such a process is underestimated. In concrete terms, this means that 42% of the smaller companies surveyed are facing a succession situation. The situation is similar for companies with over 20 employees. Here, too, 42% of the companies are facing this challenge. However, it is alarming that almost half of the companies concerned have not yet dealt with this issue. This is mostly justified by the average age of the entrepreneurs who, at an average of 58.5 years, mostly feel too young for this topic.

Here the study points out the complexity of the issue, which should not be underestimated. We can agree to this from KERN ? The succession specialists can only agree. From our experience, especially with entrepreneurs in the Ruhr region, the search for a suitable successor is anything but trivial. The results of the study are in line with our experience from many succession projects in family businesses.

50% of all entrepreneurs hide their succession situation

Entrepreneurs mostly prefer a succession solution within the family. According to the study, about 44% of the entrepreneurs want to hand over the company and its management to the family. If one also adds the wish for the company to remain in the family as property, but for the management to be outsourced, the figure rises to an impressive 53%.

This seemingly “simple” and “logical” way of continuing a company. However, this seemingly ?simple? and ?logical? way of continuing the business entails more complex tasks than passing the business on to external hands. In addition to the usual processes and sub-processes, such as company valuation, due diligence and so on, there are also the internal family conflicts. For this reason, it has proven successful in the past to implement the succession process together with mediators experienced in generational change processes. We recommend starting the process at an early stage. After all, many jobs and, above all, economic power for the region depend on the successful handover of a company.

Business closures damage economic strength

The number of entrepreneurs planning to shut down their businesses is alarming. In North Rhine-Westphalia, almost every tenth business owner is planning to close his or her company. This result of the study is a wake-up call for business promoters, chambers of crafts and chambers of industry and commerce. Here, dialogue should be sought with the entrepreneurs concerned so that a strategy can be developed to secure the business. After all, this is the only way to secure jobs and strengthen the economic power of the region.

Need for advice is great

According to the IHK study, not even half of the entrepreneurs feel well prepared at the beginning of the succession process. Experienced advisors, a lot of tact and, above all, an individual concept are needed here. Succession situations are best handled by advisors who have themselves mastered such a situation. This guarantees advice at eye level.