For SMEs in particular, handing over the business is a challenge that should be tackled strategically at an early stage.

The AAA Advisors Network, the Financial Experts Association e.V. (FEA) and KPMG jointly organised an event in Stuttgart entitled "Business succession as part of corporate strategy". The number of participants alone shows that the topic has gained enormous importance. More than 60 guests, mainly from SMEs in the south-west, gathered information and engaged in lively discussions. The topic is on the minds of many business leaders of the boomer generation, as over 800,000 SMEs will need a well-prepared handover in the next 5-7 years, and up to 300,000 in the next 2-3 years in the short term in economically challenging times.

Organising the handover is a process that should be approached early and strategically. However, transition is often the 'white elephant in the room', the process is overshadowed by day-to-day business and is repeatedly put off. In parallel to the time-critical requirements of the business - such as digital transformation - the succession requirements arising from the retirement of the baby boomers must be managed as a major challenge - regardless of whether there are potential successors within the family in the case of family-owned businesses, whether external managing directors need to be found or whether the SME is to be sold.

Albert Kirchmann (AAA Advisors) and Gunter Fauth (CEO Valegra GmbH and AAA Advisor) reported on their consulting work and presented the typical challenges and the variety of solutions. It also quickly became clear that the transition process takes time: even for SMEs, 18 months can quickly pass between the concrete start of planning and implementation, even under favourable conditions, and very often it takes significantly longer. Stringency in the process, especially in the preparation phase, pays off and, with moderate support from experienced consultants, is also rewarded with an increase in company value. Gunter Fauth's presentation on this topic is available here as a separate article.

Hubert Traut, who sold his company due to a lack of a successor in the family, emphasised the fact that advice can help in this situation in a presentation that was characterised by personal experience and, at times, emotion. The success of the transaction is measured by a number of factors: in addition to the financial aspects, the 'soft factors' are decisive for success, especially in the case of smaller SMEs, which are by far the majority in number: here, for example, the role of the company and the entrepreneurial personality as an employer in a small community, the future of the company and the workforce, and trust in the new management and the new company owner. As a testimonial, Hubert Traut was able to give an impressive account of how the process was organised, kept on track and finally brought to a successful conclusion for all old and new stakeholders with moderate help from consultants - in this case, a young new managing director with experience in the company, an experienced investor, a new sales structure and a small advisory board for the limited company.  

In his presentation, Holger Schekorr (Partner Sigma Corporate Finance GmbH and Business Alliance Partner to AAA Advisors) primarily illustrated the do's and don'ts when preparing and implementing a transaction, including some topics to ‘keep in mind’. You can find his presentation with the example of an ultimately failed transaction and the effects on the company value in a separate article (link follows). 

Prof Dr Simone Zeuchner-Egli (Corporate Governance Academy) moderated the subsequent panel discussion with the speakers and Dr Steffen Huber (Partner at KPMG) and Hans Berg (Regional Director of FEA Südwest).

Afterwards, participants took the opportunity to engage in dialogue with speakers and participants and make new contacts. All in all, it was certainly an all-round successful event, for which a request has already been made to repeat it in another region.

Source image: private photo, provided by FEA