The succession process is one of the most important milestones in the life of an entrepreneur, and sometimes they even go through it twice – once to take over the company, and once to hand it over to someone else.
Many entrepreneurs find it difficult to say goodbye to their own company, as their company often represents the realization of their life's work. This is why the transfer of companies is usually delayed until the last possible moment. In about 80% of company successions carried out during the last ten years, the handover was due to health or age. In more than half of the handovers, a solution was found that keeps things in the family (FBO).
In the case of family businesses, the supposed succession often takes place years before the actual handover. At the same time, however, experience shows that many children of entrepreneurs do not want to join their parents' company at all. What to do? In general, it is worth investigating various succession options at an early stage. One option is to search for a successor via a company exchange. While the entrepreneurs surveyed are rather skeptical about company exchanges, such platforms also offer advantages: For example, going through a company exchange increases the visibility of the company, since you come into contact with a larger number of potential buyers.
Unforeseen events can also affect the resolution or timing of the handover. For example, the current changes in the economic environment following the coronavirus pandemic have led 6% of entrepreneurs to push forward their own company handover. A blow of fate or pressure from the competition or one's own family can also unexpectedly speed up the handover of the company. Those who set the course for a smooth handover at an early stage and who deal with the company succession years before the actual handover are at an advantage.
Each succession process is as unique and individual as the people behind it. Nevertheless, the survey results provide some very valuable clues regarding the individual handover steps. In general, there are two types of succession sequences:
Once the succession process is complete, a new era begins at the head of the company. But a completed handover often does not mean an immediate withdrawal of the predecessor. According to the survey, almost half of predecessors are still on site for at least one hour a week two years after the management was handed over.
The survey shows the advantages and disadvantages of such a situation. For example, more than half of successors surveyed said they could count on the advice and wisdom of their predecessor when faced with having to make difficult decisions. At the same time, the presence of the predecessor can prevent the next generation from developing their entrepreneurial independence. In addition, the unwanted influence carries additional potential for conflict. According to the survey, 27% of those surveyed experienced moments of conflict when they took over the company.