Company successions fail time and again due to financing. This does not have to be the case! Because it is by no means the case that the financial leeway is defined solely by the existing equity of the acquirer and the goodwill of his bank. The financing expert Axel Bergmann describes the essential points of a successful financing concept in the Deutsche Unternehmerbörse.

In our observation, financing often fails due to a lack of preparation or carelessness. However, careful preparation of the topic is indispensable. The financing concept must be well thought out and take into account the interests of the financing partners. It forms the conclusion of a convincing business plan from which the financial requirements are derived. The overall concept must be coherent. What does that mean in concrete terms?

The business plan as a core element

The business plan contains all the plans of the company buyer. It presents the goals and describes the strategy and means with which the buyer intends to achieve them. The core of the business plan is the special abilities, characteristics and unique selling propositions with which the company will prevail over its competitors. This information leads to a strengths/weaknesses analysis, which in turn provides potential investors with a clear opportunity/risk profile.

In addition, the business plan shows the financial effects of the project. It shows whether further investments are necessary in addition to financing the purchase price, e.g. to embark on a growth course or to take over competitors. All information leads to a 3-5 year plan, which shows whether the business is profitable and what financial requirements will arise. Determining the total financing needs is a prerequisite for starting talks with potential financiers.

Play through several variants of financing

The next step is to determine the financing structure. Roughly speaking, this is the distribution between equity and debt capital. Here, all variants and combinations should be played through and considered. In addition to the inclusion of further shareholders, the inclusion of hybrid capital (mezzanine capital = repayable funds with equity character, e.g. silent partnerships) and debt capital should be examined. At the end of this process there is a financing structure that takes into account the interests of all parties involved.

The benefits of a meaningful business plan can be summarised as follows:

? The business plan forces the acquirer to deal with all entrepreneurial facets in a structured way, especially the formulation and operationalisation of his own entrepreneurial goals.
? The business plan is thus a guideline for any corrective measures in the event of unplanned business development. It is not so much a matter of achieving the plan exactly. Rather, in retrospect, statements can be made about the stability of market conditions and the quality of planning. The same applies to the entrepreneurial response to unforeseen changes, i.e. conclusions can be drawn about the quality of management.
? The business plan is the entrepreneurial business card of the transferee. It offers him the opportunity to present himself as a professionally and personally competent candidate.
? Last, but not least: a meaningful business plan is an effective supplement for the in-house approval process of the donors and facilitates their work.

Take advantage of the opportunities that lie in a good business plan. Make the effort, it’s worth it!