The succession issue in family businesses is currently a hot topic, but why really?
Succession family business
If you have a family business, then surely the dream is to have this business taken over by your children. Not so crazy of course, but no longer the norm in today's society. In the Netherlands, only 10% of children are willing to run the family business, according to research by EY & Center for Family Business.
Business transfer within the family is probably the most complex form of a business sale. because business and personal relationships are intertwined and the entire family is actually involved, there is often an emotional minefield. In the end, it's all about getting a transaction that is right for the entire family, one that the transferor, the transferee(s) and the remaining family members feel good about now and in the future. If the business transfer is stranded for any reason, it can lead to irreparable damage within the family.
Causes of succession problems
So where businesses used to go from father to son, today it is not so obvious. There are several reasons for the lack of succession in the family, including:
- Lack of children/grandchildren willing/able to take over the business;
- Children have more opportunities to even choose something;
- Conflicts in the family sphere;
- Children have their own businesses or want to start them;
- Current generations see more in a balanced life and choose a better work-life balance.
Other problems also come into play, such as needing to liquidate assets, wanting to spread investments, or lack of ability to expand.
As a buyer, how do you respond to this smartly?
So there are many factors that make succession issues in family businesses topical. But what should be done? Selling the business can be a good option for the family. But what do you take into account as a buyer?
For starters, it is important to realize that when selling a family business, emotions can run high. A sale often affects not only the family assets, but also the day-to-day business. Often the daily lives of those involved have looked the same for decades, and suddenly this changes.
Apart from the emotional aspect, it is essential that the knowledge transfer is optimal. If possible, put a lot of time into recording everything with the departing DGA. This special knowledge acquired over the years is worth its weight in gold for the survival of the business.
Don't skimp on hiring advisers
Succession of a family business is a delicate and costly matter. Consult advisers early on, who have experience in this field. The business picture is of course essential, but paying attention to lasting relationships and the values of the business, is also important here.
