Company succession is ? and remains ? an essential factor for politics, the economy and, of course, an enormously important topic for those affected. The succession of a company has a significant impact on jobs and the regional economic infrastructure. What are the challenges of a generational change beyond tax and business management quibbles?
According to KMU Forschung Austria, there will be about 5,000 business transfers among small and medium-sized enterprises in Austria by 2023. In addition, there are almost 1,000 EPUs that are suitable for transfer. If the transfers fail, jobs are lost and the regional supply of businesses is further thinned out. Successful transfers thus have a positive effect on important economic factors.
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What challenges do the transferors now face? I would like to report to you from our practical experience. After more than 700 successful succession projects, important insights and aspects emerge.
Take time - time for yourself!
Very often, this enormously important handover project is treated like any other project from the past. In this case, however, you are personally affected ? so you should think about the “time after”, about what will give you the new drive and the desire for something new ? when you are no longer there for your employees and your customers on a daily basis. And don’t forget that there are still many, hopefully fulfilling years ahead of you.
Don’t get “distracted” by the day-to-day business!
I am not even sure any more whether this argument is not also being used to deliberately postpone the more difficult issue of the handover.
Not wanting to deal with the issue is useless ? you will be confronted with it. And if this is the case, it is only a sign that you are starting very late.
Be it the successors in the family, the employees of your own company or your bank advisor, customers or suppliers ? they all worry and often enough worry if this important topic is not dealt with in time.
Business Succession - Create a Plan!
You may be surprised, but one of the most common reasons for handovers failing is the lack of a plan. In most cases, business succession is a once-in-a-lifetime project for an entrepreneur. However, this should not lead to making decisions only on gut instinct. Take a sparring partner, e.g. a person close to you who has experience in the matter or a professional succession expert.
However, a plan does not only mean the fiscal and financial perspective, as important as these are. It also includes a clear strategy for oneself and the company. This includes the structure of the handover, the structure of data preparation and a possible provision of information. Have you created a profile of your potential successor? How do you prepare for contract negotiations? Are you getting support or guidance in this ? You will very quickly realise that this is important.
Prepare your company!
Should I still invest now, when I want to sell soon? These thoughts always play a role in the sale, but should be put aside immediately. An investment backlog in the company is immediately used by a prospective buyer as an argument for a reduction in value.
How strong is your management level ? can you already arm yourself? The more your business model and customer contacts depend on you personally ? the lower a third party will judge the value of your company. Understandable if you take this view.
And communicate - just not too much!
Responsibilities and competences must be clearly regulated and thus also clearly communicated. However, care should also be taken not to make any reference to a sale or a handover. Rumours can very quickly spread beyond your employees to customers and suppliers. And as long as there is uncertainty, there is uncertainty. Staff leave the company, for suppliers there are other partners to focus on and customers might think about buying a substitute product.
But if there is clarity about the sale and there is an agreement, it is again enormously important that the stakeholders do not learn this information from a third party. You must use this narrow time corridor to communicate the handover to all those affected in the best sense and with a positive outlook.
We are happy to be at your disposal for further discussions and additional advice on challenges that can also be opportunities.
There is no “blueprint” for company succession. ? nevertheless, you should prepare for it. Because only if you recognise a deviation from your strategy and your plan can you also take countermeasures.
So steer personally ? and don’t let yourself be steered!
About the author:
Michael FeierMany years of experience in management and C-level positions in national and international corporations and family businesses. Accompanied succession and M&A projects in the D-A-CH region with training in NLP, as a systemic coach and registered mediator (BM f. Justiz). Responsible for the KERN locations in Vienna and Graz.
Image: Fotolia.com
TIPS for further reading:
Selling a company: Have confidence - give confidence!
Company succession in Corona times becomes more challenging
Selling your business - How to increase the value of your business!
