Every employer is obliged, sooner or later, to determine a successor. Whatever the reasons - retirement, change in the private or business situation or the desire for a lifestyle change - professional advice will help you find the right successor and make the process transparent, comfortable and safe for all parties. A romantic or emotionally influenced succession plan often leads to job losses or even to bankruptcy. Most SME owners find it difficult to pass on their business to a successor. Experiments with the succession plan cost a lot of time and money.
1. Define clear goals and make a decision Anyone who is seriously engaged in the process of personal succession in their own company, should not be rushed. It is important to consider all options and make a well thought out decision. In addition, all financial, legal and emotional consequences must be taken into account before you can begin the search for a successor. In Switzerland, more than 10,000 entrepreneurs are compelled to sort out the succession every year. Great damage is often caused by unprofessional management. In more than two thirds of cases, the succession is completed too late - or even passed by.
2. Make comprehensive preparations If the goals are clearly defined, all further steps need to be planned meticulously and promptly. Under no circumstance should a company be passed to a successor without a detailed reprocessing of all company documents. The tremendous expertise of the previous owner must be documented as much as possible. Knowledge that cannot be documented, must be distributed to different individuals. Many owners underestimate the time required or employ a successor without having made the necessary preparations.
3. Preserve absolute confidentiality and discretion Confidentiality and discretion are the key to a successful business succession. There is a risk that information about the upcoming change may be made public and so make important customers or employees in key positions to leave the company. The resulting damage can be immense. It is essential that you work with a Business Broker AG succession consultant to ensure confidentiality and discretion may be. All potential successors have to sign a confidentiality agreement right at the beginning.
4. Find the right SME successor The biggest challenge is finding a highly motivated and sound successor, who has the necessary skills to takeover the company. The appropriate successor is rarely found in the family or in the private circle. Business Broker AG’s database has grown over the years and provides thousands of potential successors excellent services in finding the appropriate successor.
5. Negotiate to targets and draw up fair contracts If the perfect successor has been found, all conditions must be defined. The price and contract negotiations require extraordinary dexterity. A mediator with the prerequisite experience can assist the parties to understand the other side and bring about an agreement with creative solutions. Many successions fail in this phase. Misunderstandings, false pride, as well as over-zealous trustees, bankers or narcissist lawyers can jeopardise the project at any time. The style of communication, the negotiation skills, the mutual respect as well as the will to find a viable solution for both parties will promote the signing of the contract.
6. Optimal training concludes the successful SME succession The succession process is not complete until the successor is able to run the business. Experience shows that despite the perfect preparation in the run up, it is difficult to predict how long the assistance of the former owner will be required. We often recommend a sliding scale over the period of a progressive learning curve according to hourly rates. This will ensure that the successor quickly acquires the necessary skills and takes over responsibility.
Ask for our no-obligation information pack: (contact form >>).