Strategy

5 Tips for Managing Corporate Succession

  • Andreas Holch
  • December 3, 2020

More than half a million SMEs are looking for a successor. Most of these SMEs are usually managed by their owners and therefore, depend highly on the knowledge and the contacts of the proprietor. 

According to Andreas, the planning of a corporate succession aren't often approached from a strategic perspective because: 1) There is no obvious successor2) There is an emotional attachment to the enterprise

The planning of a corporate succession is not often approached from a strategic perspective because there is no obvious successor and there is an emotional attachment to the enterprise. As a result, the company not only suffers from the threat of closing down, but also a loss of assets for the owner.

How to Manage Corporate Succession

Apart from the general will of the person, corporate succession is one of the biggest obstacles to retirement. Therefore, companies can benefit from a defined decision making process by:

1. Analyzing the goals and needs of the owner for both; the successor phase and the retirement phase.

2.Carrying out a detailed stocktaking of the company: contract inspection, product and customer analysis

3. Incorporating a transfer of knowledge so that the search for a successor is developed. The processes and reporting structures can then be established accordingly. In addition, there can be a search for qualified staff to adjust legal structures

4. Developing a communication strategy for the private, and the operational sphere and planning the necessary steps by coordinating with other experts, such as the tax accountant of the company.

5. Optimizing the valuation of the company via strategic changes of the product and the financial side, if necessary.

As a result, the corporate succession with a new proprietor or new management can be secured, and higher revenues from selling the company can be attained.

The planning of corporate succession ensures ease on the part of the owner, as well as clarity for the company. This means an easy, stress-free transition into retirement.