Business succession advice - How to master the generational change
Handing over a company to the next generation is one of the biggest milestones in the life of an entrepreneur. This generational change offers enormous opportunities for a successful new start, but at the same time harbours a number of challenges for the security and success of one’s own life’s work.
Professional advice on company succession offers you valuable support throughout the entire process. It helps you avoid potential pitfalls at an early stage, develop a sensible succession strategy and successfully organise the handover for everyone involved – so that you know the fruits of your labour are in good hands.
Consultancy services for the succession of your company
Company succession is a complex and important process that ensures the continued existence of your company. LW-P Lüders Warneboldt offers you comprehensive advice on all aspects of company succession. Our experienced consultants will support you, from analysing the current situation and developing a strategy to identifying and approaching successors.
- Analysing the current situation of your company
- Identification of strengths, weaknesses, opportunities and risks
- Evaluating the company’s figures and future potential
- Determining the goals for the succession plan
- Development of a customised succession strategy tailored to your needs and those of your company
- Consideration of various succession options (internal vs. external succession, family succession, management buy-out, etc.)
- Creation of a timetable for the implementation of the succession plan
- Support in the search for suitable internal or external successors
- Creation of requirement profiles for potential successors
- Approaching potential successors and supporting the selection process
- Support with the drafting of contracts
- Support during negotiations between transferor and transferee
- Moderation of conflicts and tensions in the handover process
- Ensuring a smooth handover process
Why early succession planning is crucial
One of the biggest challenges is often the time factor. The earlier you deal with your succession, the more options you have. Long-term preparation makes it possible to find the optimal solution for your company in peace – whether a family member, shareholder or external buyer. In addition, important tax and legal aspects can be clarified in good time.
Reasons for professional advice on company succession
The complexity of succession planning requires a profound understanding of economic, legal and emotional factors. Professional advice from LW-P Lüders Warneboldt offers you the following advantages:
We have many years of experience in supporting succession processes and know the typical challenges and pitfalls.
As an external consultant, we are neutral, have an outside perspective and can evaluate every step openly and transparently.
We use proven methods and tools to support you with our expertise in analysing, developing strategies and implementing succession planning.
Counselling is of course confidential and your interests are protected.
Start a structured succession process with us now! Arrange a non-binding consultation today.
Strategic planning for succession and company sale
Strategic planning begins with a comprehensive assessment of the company’s current status in order to identify strengths, weaknesses and potential opportunities. The aim is to optimally prepare the company for the handover by optimising operational processes, strengthening financial structures and aligning the corporate culture with the future management.
A key element is the development of a detailed succession plan that includes timeframes, potential successors, financing strategies and contingency plans. Careful planning not only ensures the long-term success of the company, but also minimises risks and conflicts during the transition. The implementation of strategic planning is supported by our experienced team, with your personal circumstances determining the composition of the team. The team regularly consists of lawyers, tax advisors, auditors and M & A consultants.
Our holistic succession process for your company
- Analysis of the current situation: In a first step, we analyse the current situation of your company together with you. This includes analysing the company figures, the market situation and the competitive position.
- Defining the goals: What do you want to achieve with the succession? Do you want to secure the continued existence of the company, maximise the purchase price as a prerequisite or secure your retirement provision?
- Developing a strategy: Based on the analysis and your goals, we develop a customised strategy for the succession.
- Determining the company value: We use various methods to determine the value of your company. These include the discounted cash flow method (DCF), the multiplier method, EBIT (earnings before interest and taxes) and the net asset value method.
- Preparation of a valuation report: On request, we can prepare a valuation report that presents the value of your company in detail and transparently.
- Creation of a requirements profile: We create a requirements profile that describes the most important characteristics and qualifications of the successor.
- Search for suitable successors: We use various channels to find suitable successors, e.g. company exchanges, online platforms, personal contacts and recommendations.
- Support during the selection process: We support you in selecting a suitable successor and drafting the contract.
- Preparation of a company purchase agreement: We draw up a purchase agreement that regulates the most important points of the transfer, e.g. the purchase price, payment modalities and liability regulations.
- Conducting negotiations: We support you in negotiating the purchase agreement and ensure that your interests are protected.
- Development of a transition plan: We develop a transition plan that regulates the handover process and the familiarisation of the successor.
- Support during the transition phase: We accompany you during the transition phase and support you in answering questions and solving problems.
Work with us to develop the optimum succession solution for your company!
Internal or external company succession?
One of the key decisions for your succession planning is the question of whether an internal or external successor should take over the company. Both options have advantages and disadvantages that should be carefully weighed up.
Internal succession offers a seamless handover, as the successor already knows the company and its culture. However, there is only a limited selection of suitable candidates within the family.
Advantages:
- Continuity: The corporate culture and philosophy of the company remain intact.
- Trust: The successor is familiar with the company and enjoys the trust of the employees.
- Motivation: The successor is highly motivated to continue running the company successfully.
Disadvantages:
- Qualifications: The successor does not always have the necessary qualifications and experience.
- Family dynamics: The handover to a family member can lead to conflicts and tensions.
- Limited choice: The choice of suitable successors is limited.
With an external buyer, you gain an experienced and unbiased view of your business. Fresh ideas, sound management expertise and new networks can provide the company with important impetus for growth.
Advantages:
- Qualifications: The successor may have the necessary qualifications and experience.
- External perspective: The successor can bring new ideas and perspectives to the company.
- Greater choice: The choice of suitable successors is significantly greater.
Disadvantages:
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- Continuity: The corporate culture and philosophy of the company can change.
- Trust: The successor must gain the trust of the employees.
- Costs: The handover to an external successor can be associated with high costs.
Find a successor for your company
The search for a qualified successor is one of the biggest challenges in the takeover process. It is important to take different approaches to find suitable candidates.
Company and succession exchanges offer a good platform to present your offer to a broad target group. We create an informative company exposé (information memorandum) and publish it specifically on relevant stock exchanges. This gives you access to a pool of interested investors, entrepreneurs and financiers.
At the same time, we work with a direct, personal approach to potential candidates from our network and the industry. This targeted acquisition of “perfect-fit” entrepreneurs increases the chances of success. We have experience in screening and qualifying interested parties.
Our strategy is to address as many potential successors as possible through a multi-channel approach.
Succession counselling for medium-sized companies
As a medium-sized company ourselves, we understand the particular challenges that owners and founders of this size face when organising their succession. Professional advice tailored to SMEs is the key to a successful handover of your life’s work.
Our experience in supporting medium-sized family and owner-managed companies makes us a competent partner at your side. We know the individual structures, corporate cultures and values that need to be taken into account in a succession solution.
Are you an SME entrepreneur looking for customised solutions? Let’s work together to develop the optimum succession strategy! Start the process now.
Tax and legal advice
Competent tax and legal advice is essential for a smooth business succession. Only if all relevant regulations are taken into account and structuring options are optimally utilised can the generational changeover be realised smoothly and cost-effectively.
As a law firm specialising in tax, corporate and inheritance law, we have the necessary expertise to provide you with comprehensive advice on all tax and legal issues relating to succession. Our aim is to identify risks and pitfalls at an early stage and to show you solutions for realising the succession in a tax-optimised manner and on a sound legal basis.
Whether inheritance and gift tax, real estate transfer tax, corporation tax or income tax – together we will develop a customised succession strategy that takes all aspects into account in the best possible way. We also draw up the necessary contracts and agreements, such as succession or entrepreneur contracts.
With our interdisciplinary consulting team, we are your competent partner for the entire tax and legal side of your company succession. Benefit from our in-depth expertise in this highly complex field.
Checklist for the successful succession of your company
A structured approach is the key to a successful business succession. With the following checklist, you can keep track of the most important aspects and tackle the handover process step by step:
- Analysis of the current situation:
- Company figures
- Market situation
- Competitive position
- Definition of objectives:
- Continued existence of the company
- Maximum purchase price
- Retirement provision
- Development of a strategy:
- Internal or external succession
- Timetable
- Financing
- Determination of the enterprise value:
- Discounted cash flow method (DCF)
- Multiplier method
- Net asset value method
- Preparation of a valuation report:
- Detailed and transparent presentation of the company value
- Creation of a requirements profile:
- Qualifications
- Experience
- Personal characteristics
- Search for suitable successors:
- Online platforms
- Personal contacts
- Recommendations
- Support during the selection process:
- Selection interviews
- references
- Contract negotiations
- Preparation of a purchase contract:
- Purchase price
- Terms of payment
- Liability regulations
- conduct of negotiations:
- Safeguarding your interests
- Ensuring a smooth process
- Development of a transition plan:
- Familiarisation of the successor
- Handover of responsibility
- Communication with employees
- Support during the transition phase:
- Answering questions
- Solving problems
- Procurement of the necessary financial resources:
- Equity capital
- Bank loans
- subsidies
- Advice on all tax and legal issues:
- Company valuation
- gift tax
- inheritance tax
- company law
- contract law
- labour law
- Transparent communication with all parties involved:
- Employees
- customers
- suppliers
- the public
- Evaluation of the succession process:
- Successes
- Challenges
- Need for improvement
- Documentation of the succession process:
- Knowledge transfer
- Reference work for future successions
How to master challenges and pitfalls
Company succession often presents challenges and pitfalls. Careful preparation and planning are essential in order to master these successfully. As experienced consultants, we know the most common stumbling blocks and can help you skilfully avoid them.
You should bear the following points in mind:
- Start planning early: the earlier you start planning, the more time you have to consider all aspects of the succession.
- Seek professional support: Get support from experienced advisors to help you master the challenges of succession.
- Communicate transparently: Inform everyone involved about the succession process and answer their questions.
- Choose the successor carefully: Make sure that the successor has the necessary qualifications, experience and motivation to continue running the company successfully.
- Prepare the successor for taking over the company: Give the successor sufficient time to adjust to the new task.
FAQ - Quick answers to frequently asked questions
Business succession refers to the transfer of a company to a new owner or successor, often in the course of a generational change.
When selecting a consultant, important criteria include their experience and expertise in all relevant legal areas, a holistic consulting field and a regionally anchored network.
The core tasks include company valuation, development of a succession strategy, search for successors, contract drafting, tax and legal advice and support during the transition phase.
In principle, there is the option of an internal solution with a family member or employee, an external solution through an investor/buyer or the complete sale of the company.
Transferors can make financial provision for retirement through the sale of the company, pension agreements or reserves.
In addition to using succession and company exchanges, it is advisable to approach potential investors and entrepreneurs directly, for example via our networks and industry contacts.
Yes, as neutral advisors with experience in family situations, we can often defuse conflicts, moderate communication and ensure a constructive dialogue. Mediation often helps to take emotions out of the equation.