In turbulent times like these, numerous external company takeovers and successions are still pending. It is estimated that at least 15,000 companies a year have to solve the problem of corporate succession externally.

Corporate succession Company sale Sell company

The implementation of corporate succession represents a major hurdle for the majority of entrepreneurs, as their own company should only receive the best solution for the succession. However, this requires sophisticated preparation and implementation of the transfer process. The time required for such a corporate succession is often underestimated, because the entrepreneur will not be able to get out as quickly as expected. The new successor will certainly bind the entrepreneur to the company for at least another 1-2 years in order to secure the transition. Likewise, tax deadlines should be discussed with your tax advisor at an early stage.

Many building blocks later form the foundation for a successful corporate succession. One of these building blocks includes the continuous willingness to invest in order not to lose the technological connection and to further drive organic growth. This must be done taking into account the interests, as the return on investment may occur much later in terms of time and it may therefore be that the entrepreneur is no longer in the company. On the other hand, an excessive backlog of investments can have a negative impact on the purchase price. Furthermore, it is also important to have the financial planning for the following years in place so that no major corrections have to be made. The latter also forms the basis for the growth story by the new investor and can lead to a higher purchase price being achieved.

Another element for a smooth and targeted implementation of your own corporate succession concerns the entrepreneur himself. How can the company’s dependence on its own entrepreneur be gradually reduced further and further? This also contributes to risk minimization and thus has a positive effect on the transaction value to be achieved. The owner must be able to let go and this demands a lot from the entrepreneur. It is therefore important to build a second management level as soon as possible and distribute the tasks of the previous owner across several shoulders. The trust in the other people on the second level must be present for this. A company with too much dependence on the owner will also take more time to regulate external corporate succession. This naturally also includes the owner-specific expenses to reduce the operating result, which in turn pulls the valuation basis down. What non-operating assets are slumbering in your balance sheet?

Good preparation is half the battle for a successful corporate succession! Do not hesitate and create the conditions for the upcoming company transfer now. To do this, you should deal with the selection of a specific M&A advisor very soon. In exchange, the topic of company valuation, growth potential and the implementation of the M&A process will be discussed in more detail so that you can also find the right external corporate successor.

Do you have any questions or need support?

We are happy to be there for you by phone at 02150 7058 210, by e-mail at mergers@starkpartners.de or on the web at www.starkpartners.de.

Succession