Mediators for Business Succession, Baden-Württemberg (D)

Katja Gieseler Unit Start-ups and Business Transfer/

February 2010

ifex - Initiative for start-ups and business transferBaden-Württemberg

• - Initiative for start-ups and business transfer

• founded in 1994 as a pilot project

• since 2001: continued permanently

• since 2004: part of the Ministry of Economics Baden-Württemberg

• annually budget: 8-10 Million € (incl. EU)

• staff members: 10

• Winner of the European Enterprise Awards 2006

• Key policy areas: school and entrepreneurship, business transfer, branch/ regional and target group specific activities (students, high growth start-ups, women entrepreneurs, small business, regional projects, etc.)

Business transfers in Baden Württemberg

~ 11.000 enterprises per year ---> 140.000 jobs(2005 - 2009 -> 45.000 – 60.000)

Source: Institute for SME Research, Bonn

family member/s 44%

employees10 %

externals38 %

~ 10 years ago: 75%

closings8 %

Business transfers in Baden Württemberg

Challenges of external business succession

• business owners are overstretched by the complex task

• transferors start planning business succession too late

• external successors face financing problems

• finding the right external successor/ business

• transferors having no successor within the family can hardly be reached

• etc.

There is a need for a precocious, active and direct approach

Business transfers in Baden Württemberg

4. Qualification 5. Coaching for Transferors 6. Succession Mediators 7. Coaching for Transferees 8. University Courses

12 Points Programme Business Succession

1. Information 2. Public Relations

3. Female Succession

9. Loan Programmes10. Guarantees11. Equity Financing

12. Further Development

Succession Mediators

The Concept

the mediator

• identifies business owners potentially handing over their enterprises

• contacts proprietors personally/visits the enterprise• creates awareness among company owners and sensitizes

them for an early planning of business succession • assists company owners to find a suitable successor

• assists transferees to find a suitable enterprise

• administrates a non-public database used for the matching

Succession Mediators

The Concept

the mediator

• is aware of that the discussion with the proprietor contains psychological aspects and family interests

• builds up a regional / local support network

• shows (successor and transferee) support opportunities and

• moderates the entire succession process

increase the number of successful transfers• more employees• more female successors

Aim

Succession Mediators

Target Group

• owners of family enterprises having exceeded a certain age (aged 55 plus)

• entrepreneurs

• chambers, business promotion services, tax consultants, lawyers, banks or management consultants, etc.

Succession Mediators... based at

6 chambers of industry and commerce:

IHK Heilbronn-Franken (first mediator)IHK NordschwarzwaldIHK ReutlingenIHK Rhein-NeckarIHK Südlicher OberrheinIHK Ulm

2 chambers of craft:

HK Region Stuttgart HK Karlsruhe

2 associations:

DEHOGA BeratungEinzelhandelsverband Baden-Württemberg

Business Succession Mediators – 2 examples

Jürgen Becker Dr. Achim Upplegger

Experience: SMEs as clients granting credits solutions for business

Entrepreneurial background: - bank employee (3 years training) - business economist (studies) - top positions in different banks

Experience: entrepreneur business succession in his own company

Entrepreneurial background: - studied law + economics - 30 years within the media sector - 10 years owner of a publishing company

Business Succession Mediators

Results/Facts

• the succession mediators inform and accompany about 1.000 business successions per year

• the annual turnover of the successfully transferred enterprises 2004-2008 : 149 million Euro

All proprietors of supported enterprises and successors alike expressed a positive opinion on the instrument of succession mediators.

Succession mediators

Financing

• the ten mediator-posts are funded by ifex in the framework of the European Social Fund with about 320.000 € per year.

• eligible costs: personnel costs, costs for advanced training and travelling expenses

• a co-financing of 55% is given by the chambers and associations involved

Succession mediators

success factors and useful hints

• access to entrepreneurs is easier when the mediators have an entrepreneurial background

• a specialization in certain sectors of industry is of advantage

• support is expected mainly in the field of business appraisal and financing of the purchase price

• usually the approach should be direct and requires mutual trust between entrepreneur and facilitator

Succession mediators

success factors and useful hints

• the earlier entrepreneurs are approached, the sooner the situation of the future succession is recognized and can be tackled

• the sensitizing phase is particularly time-consuming: transferors are not familiar with the complexity of succession

• it is recommended to approach the target group with more attractive, positive issues such as “safeguarding the future“ or „continue the success of a lifework”

Katja Gieseler Unit Start-ups and Business Transfer/

phone: + 49 (0) 711/123 – 2697

e-mail: katja.gieseler@wm.bwl.de