"Transfer of Businesses – and measures to facilitate and stimulate the take over"
The seminar in Brussels on November 29th was arranged by the Swedish Foundation for Small Business Research (FSF), the Swedish Agency for Econimic and Regional Growth (NUTEK) and the Swedish Institute for Growth Policy Studies (ITPS).
Background: One third of the companies in Europe have to be transferred to the next generation in the coming years. A great deal of attention has therefore been paid to successions of generations in companies and the dedication to encourage the formation of new companies. This is no doubt very important but equally important is to make it possible for existing strong companies to carry on and continue to grow.
“Transfer of Businesses - Continuity Through a New Beginning”
Kirsi Ekroth Manssila, Deputy Head of Unit, DG Enterprise and Industry, Unit E.1 - Entrepreneurship
Kirsi Ekroth Manssila talked about what the EU-comission has done from 1994 and onwards in the area of business transfers, with the Lissabon strategy as
Recently published a report "Continuity throug a new beginning" – We can't accept that these business transfers fail, so we have to help.
One of the key issiues in business transfers is the fact that entrepreneurs lack the experience.
–You only transfer business once and don't gain any experience in the area and people tend to start preparing very late.
The basis of the commissions work are the recommendations from 1994. They follow up the membership states and what they have done to implement the recommendations.
Up until today about 55% of the recommendations have been implemented in thel older member states and slightly lower in newer membership states.
Conclusions
• Business transfer should receive the same attention as start-ups. Transfers have a higher success rate than start-ups
• Transfers require more financing than start-ups
• Support preparations in time as in the examples of Austria, Netherlands and Sweden
• Both inheritance taxes and taxes on transfer to third parties must be transfer friendly
• Proper structure to implement the recommendations
From left: Hanna Bruce, Helena Thorstensson and Kirsi Ekroth Manssila
”What Sweden is Doing to Facilitate Transfer of Businesses”
Sigrbritt Larsson, project leader of the national program for transfer of business at NUTEK, Sweden.
Three year ago the swedish government gave NUTEK the task of creating a program on how to facilitatet the transfer of busiensses in Sweden, the program started in february 2005. Aim of the programto increase the number of successful transfers and that companies consequently will prosper
The government stated four issues as important
• measures to facilitate the transfer of business in SMEs
• transparent marketplaces for both buyers and sellers of small companies
• in line with the governments aim that transfers should be equal to start-ups
• the programme is operating in joint effort with Almi Företagspartner (business partner), the Federation of Private Enterprises and the Confederation of Swedish Enterprise
The programs target groups
• Companies owned by at least 50 percent by the company manager
• Companies having between 2-49 employees
• Company manager more than 50 years old
• Potential buyers - focusing on young people
Sigbritt Larsson, NUTEK
“Transfer of Businesses in a Research Perspective”
Annika Hall, Jönköping International Business School, Sweden
Associate professor Annika Hall wants to look beyond the figures and the hard facts of business transfers.
– Who is there to help with the "soft issues". When it comes to "hard" factors there are a lot of experts to consult.
Her research show that the soft issues are often the most important.
– The biggest single reason for most business owners not to transfer is that they love what they do. It's too much fun
Although encouraging early planning of business transfers she can understand the problems.
– We tell them to plan, but what and when should they plan. They are busy and the daily work interfers with the planning.
She brought up four phases you must go through when transferring
I: Bring the question up
II: Acquire knowledge and reflect - to whom, how much, the role after the transfer
III: Decide on a solution - involve stakeholders, take advice, make own decision
IV: Implement solution
... and handle post-transfer challenges!!!
Conclusions
• Business transfers are emotional
• Business transfers challenges identity
• Business transfers are multirational (Instrumental, Expressive, Relational)
• Business transfers are complex
• Business transfers are all unique- same questions but different answers!
Annika Hall
"Good Practices from the Member States"
Hanna Bruce, CEO Växbo Lin AB, Sweden Helena Thorstensson, CEO, Process Produkter AB, Sweden
Two examples of business owner taking over existing businesses concluded the seminar.Hanna Bruce took over an existing weaving factory in a small town in Sweden without any experience on running a company. Helena Thorstensson, with previous experience as a CEO took over an industrial company in the same region.
Their powerpoint presentations will be up on this page soon
