Succession is everything. Sooner or later, every company will have to face it. And for many SMEs in this country, in the not too distant future. According to estimates by the Bonn Institute for SME Research, around 190,000 company successions are due to take place between 2022 and 2026 because the management is leaving. The figures vary greatly from state to state – Bavaria, North Rhine-Westphalia and Baden-Württemberg are most affected. Due to demographic factors, the number of handovers per year tends to increase. Since most companies are family businesses, the internal family handover is the number one succession solution. But what happens if there are no competent descendants willing to lead the company? Then there are two options: Management buy-in (MBI) and management buy-out (MBO). What sounds complicated is actually quite simple: In an MBI, the company is sold to an external management, i.e. to a third party. And in the case of an MBO, the company is sold to management from within the company, for example to the management or employees. Whether the succession can be arranged within the family, within the company or outside the company, and which succession solution is best in each case, depends on the individual factors of the company.
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