AAA Advisors and the Financial Experts Association (FEA) are once again hosting an entrepreneurs' evening on the topic of ‘passing the baton.’

For many SMEs, changes in ownership and generational transitions are an indispensable part of their corporate strategy.

As a guest of KPMG in Frankfurt, AAA Advisors Christa Stienen and Albert Kirchmann were able to highlight and discuss the necessary steps and processes involved in preparing for a transaction with the attending entrepreneurs.

Particular emphasis was placed on the relationships between the parties involved – especially within the family in the case of family businesses.

Our AAA Advisors member Christa Stienen gave an impressive presentation entitled 

“Passing the baton as part of corporate strategy”,  

emphasising that a company transfer is so much more than an organisational and legal process. The interests of those involved, and in particular their relationship and family dynamics, must be brought into focus. It is precisely this part of the process that requires professional support.  

Christa drew on her many years of practical experience to address this often emotionally charged area at the FEA/AAA Advisors event on 21 August.

For family businesses, it is particularly important to think about succession early on, given the emotions that are almost always involved. Involve the family in your considerations, discuss the options (e.g. transfer to a suitable successor from the next generation or to a non-family member, or partial or complete sale). Then, if necessary, re-evaluate the succession process – naturally also in light of your own retirement provision and, if applicable, with a view to securing the family's assets. And then, mandate advisors if required to drive the process forward into its final phase, keeping it as confidential as possible on the one hand and as transparent as necessary internally on the other.

In conclusion, medium to long-term corporate strategy must take into account that this process often requires years of preparation, and especially in family businesses. A considerable amount of time may be spent clarifying the individual interests of those involved and possible ways of implementation before the transition process becomes public knowledge or an M&A advisor is mandated to handle the sale. Even though a sale can often be achieved in less than 12 months from the granting of the mandate and on fair terms, (family-)internal clarifications should be started up to two years in advance in order to avoid delays caused by internal differences later on.