Between 2002 and 2008 around 178,000 family businesses in Germany were handed over to new managing owners. This number represents around seven percent of all family businesses. A change of owners and managers due to business succession or generation change constitutes a critical phase for each firm. The lack of timely and thorough arrangements of the company succession frequently leads to firm crises and closures. Company successions which occur due to the age of the entrepreneur can be planned. The situation is much more critical in the case of company successions which become necessary unexpectedly and in the short term. In the case of unsuccessful succession workplaces are in danger. In the past, half of the successors, i.e. the new owners and managers, were family members and the other half were from the firm or from outside the firm (see Habig and Berninghaus, 1998). Due to the ageing society, it can be assumed that handovers to non-family successors will gain importance in the future.
Given the abundance of problem areas and structuring possibilities, a need for consulting and information and frequently also for financing exists for the persons involved in the company succession. While the person handing over the business needs to consider the law of succession and the choice of the suitable handover form, the central question that arises for the successor (or the successors) is, whether it is worth to continue the business at all. In the first place, the successor must check whether the firm can meet the requirements of the current and future economic situation, whether his professional and financial existence can be secured with the continuation of the business and whether the conditions of entry, such as the purchase price, are right.
The successor faces a range of challenges. Frequently, the succession is as complicated as developing a new firm. Existing studies observe the challenges mostly from the perspective of the person handing over the business and focus, among other things, on the possibilities of the preparation of the succession, the finding of successors and the financing of the succession (see, inter alia, www.nexxt.org).
In contrast, the aim of this study (available in German) is to highlight the generation change in medium-sized firms from the successors' perspective. The focus is placed on the successor's qualification necessary for the takeover, the role of the former owner in the process of handing over the business, special challenges and structural changes in the company and the company development in the years after the takeover. The study is based on different databases:
- Mannheim Enterprise Panel (MUP),
- 2. the data of a firm survey addressing medium-sized family businesses, which are owner-managed, and
- 22 case studies of medium-sized businesses in Germany.
Gottschalk, Sandra, Daniel Höwer, Georg Licht, Michaela Niefert, Annegret Hauer, Detlef Keese, Michael Woywode and in Zusammenarbeit mit Verband der Vereine Creditreform e.V. (2010), Generationenwechsel im Mittelstand. Herausforderungen und Erfolgsfaktoren aus der Perspektive der Nachfolger, Baden-Württembergische Bank, Stuttgart. Download