Handing over one’s own business is a challenging topic. Many entrepreneurs find succession difficult. Even if, like one of our clients, they deal with it at an early stage: Frank S., a medium-sized entrepreneur in his early sixties, had started to deal with the issue of succession in his mid-50s. So, he was well on time. It was clear early on that his only son would not take over the company. So how to proceed? Sell the company? In order to get this complex decision right, Frank S. called in an expert.
Succession has (too) many facets
In the time that followed, many options were opened up and many solutions developed. The seasoned entrepreneur had a hard time deciding which path was the right one for him. The enquiries and discussions with the expert led to even more possibilities and variants. For the entrepreneurial family, the chapter “succession” thus became more and more of a test of endurance. It was an unsatisfactory, lengthy and exhausting process for everyone involved. Not only the question of “to whom” in the succession was difficult to grasp, but also the way of “how”. In the end, there was a lot of analysis and discussion. And nothing happened. The feeling of “we can’t get it right” overshadowed the otherwise well-run day-to-day running of the company. At this point we entered the process, and it quickly became clear: there is an urgent need for focus in order to prepare and make a decision.
Focus on the objectives
Of course, an individually suitable succession solution is not easy to identify: Family internal succession, divestment, MBI, MBO as succession solution or outside management. These are just the big questions which, the more concrete it becomes, branch out into many sub-topics. That is why we at THE MAK`ED TEAM attach great importance to a structured approach. Whatever the optimal individual solution looks like, one thing is clear: you cannot (also) keep all options open in the succession process.
Structured succession processes
We then used a systematic approach to develop a succession solution that is sustainable and satisfactory for the entrepreneur, the entrepreneurial family and the family business. In order to achieve this, Frank S. and his family dealt intensively with their ideas and wishes for the future. Initially, they did so completely independently of technical questions of succession and practical implementation, but with a clear focus on the question of which constellation could generate satisfaction. So, the family talked to us a lot about their understanding as an entrepreneurial family and it became clear that they wanted to remain that way. The two daughters of the only son, who had embarked on a successful career in another industry, were to be given the opportunity to run the family business in the future.
After Frank S. had always had the feeling that he wanted to keep one or two options open, the succession planning was now clearly focussed on one goal, which was consistently pursued. The sooner, the better. Because everything needs systematic and company-oriented preparation in order to make the succession step successful and to secure the future viability of the company. Long before the generation change, succession management can, for example, be about the acquisition of competencies for the next management generation.
Or about relevant questions of detail that need to be considered in the future circle of shareholders. Whatever the succession in the respective company looks like: In most cases, it involves a complex task, which can, however, be managed well with a clear objective. THE MAK`ED TEAM therefore not only works with a broad range of expertise. We also accompany the succession processes with the necessary tact and sensitivity. Our structured approach has already proven itself in many succession processes. In the case of the entrepreneur Frank S., the family-internal succession shifted to the shareholder level, while an external managing director was appointed. In preparation for this step, the interaction of the shareholder group with the external management was designed in the same way as the transfer of the company shares to Frank S.’s son and his children. In addition, steps were taken to prepare the daughters for a possible role in the management of the company in the coming years. The time has been bridged until the next decision as to whether the granddaughters of the entrepreneur can possibly take over the management. For this purpose, a suitable managing director was sought and the management team in the company was further developed in its competences.
Our medium-sized client Frank S. is one example of many. Again and again, we observe that the succession process drags on because many entrepreneurs find it very difficult to make the decision – the right decision. THE MAK`ED TEAM concentrates on an approach to succession processes that should ultimately provide the entrepreneur with the necessary clarity about his goals and what is feasible. This creates a good basis for preparing and making decisions.
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