According to calculations by the Institut für Mittelstandsforschung in Bonn (Institute for Small Business Research) approximately 300,000 mid-sized family businesses face a change in management within the next few years, half of them for reasons of the age of the owners respectively management. The search for a successor, whether within the family, among members of staff (MBO) or externally (MBI), is often approached much too late, despite the fact that a successor is essential if the business is to survive. Through cooperation with private equity companies, strategic investors, and consultations with numerous small and medium-sized companies sector entrepreneurs, we attempt to resolve the problem in a goal-oriented manner, usually by taking the following steps:
- Summing up the company’s situation. We are entrepenuers, and over the years, we have held a considerable number of executive-level roles. Consequently we are professionally experienced to assess each company’s situation in detail enabling us to create an optimal profile for top-class personnel decisions as required in successions.
- Research and participation models. Due to our excellent comprehensive branch-independent network, we are in the position to identify managers in the executive sector whose next career goal is self-employment, and therefore are planning on acquiring an appropriate business share by management-buy-in. We also accomplish and support investors whose major strategic significance is the acquisition of a business enterprise and which then have the ability to supply the necessary managerial expertise for the further development of the business after acquisition. The third possibility of the entrepreneur’s succession is that we assist in the so-called management buy-out process, where we put eligible top and middle management in the position to purchase their company , with the help of financial investors. With this procedure, it is vital to acknowledge that top performers in top positions will only be willing to discuss constructively a potential interest in participation when being addressed at the first anonymous presentation of the company, if they are convinced of the competence, seriousness and reputation of the consultant.
- Choosing the right person. Strictly speaking, the complexity of a person character cannot be described adequately in an abstract profile. Therefore, a catalogue of questions or characteristics which one checks off in an interview cannot be considered essential. Much more important is the deliberate creation of a dialogue, in a relaxed discussion, which results in obtaining as much relevant knowledge about the potential acquirer as possible, and determining if he or she can fit into the culture of the business. When getting to know the potential acquirer or successor, we are particularly keen to learn about their achievements as a top executive or entrepreneur, as well as their social stature. We are not so much interested in what they have done, but more for what they have achieved, how they conduct themselves, and whether they have development potential as an entrepreneur. We subsequently come to our decision for the presentation based on experiences gained from other mandates in the M&A field.
Once the right person has been found, we support
the handover of the company to that person by integrating our cooperation partners from the private equity market. These private equity companies acquire the owners’ company on behalf of the MBI entrepeneur and finalize the succession.