The Netherlands has over 2 million businesses. SMEs (up to 250 employees)
account for over 95% of these.
It’s expected that approximately 80,000 SME entrepreneurs will have to arrange their succession within ten years. This is a complex issue that affects the very heart of the business, especially because the entrepreneur or managing director is very closely tied to their company.
The De Consularis Foundation consists of experienced and practice-trained experts who advise and support entrepreneurs in business succession through an innovative approach: Succession . This approach aims to balance organizational, emotional, financial, and other aspects. All parties must be able to complete the business transfer satisfactorily, and the business must continue successfully.
Business succession: a complex issue.
Previously, the focus on business transfers was primarily on the succession from father to son/daughter, or perhaps another (close) family member. Recently, this has become much less obvious, and managing directors (DGAs) are facing all sorts of new questions.
- As an entrepreneur, what do I want for the future of my company?
- Should I keep ownership of our business in the family and look for a new salaried director?
- Is my management capable of taking over the company?
- How do I find a suitable successor outside the company?
- Am I selling my company to another party?
- What does selling mean for the future of my business?
- What does the transfer mean for me?
Transfer problems:
Research shows that transfer problems are a major cause of bankruptcies. It also shows that more than half of all acquisitions are unsuccessful or even fail completely. Many former managing directors admit, often with some hesitation, to being dissatisfied with how things went after the transfer. There are two underlying reasons for this.
Causes of unsuccessful business transfer:
1. Advisors often focus too narrowly on the “hard side,” the legal and financial aspects, while the “soft side,” the more emotional aspects, play just as much of a role. The managing director wants to leave their “child” in good hands.
2. The focus is often strongly on short-term actions, aimed at preparing the company for sale as quickly as possible. A long-term vision, with an eye for continuity, growth, and innovation, is crucial for both the present and the future. This is where the “strategic growth potential” and the true value of the company lie.
The innovative total approach of the Consularis
The De Consularis Foundation is comprised of experts in business transfers. Many Consularis have been directly involved in one or more transfer situations. They have sold their own businesses, acquired companies from managing directors, or been acquired as managers. They have also supported managing directors with succession planning, acting as advisors or mentors.
Succession
The Consularis Foundation uses an innovative approach developed based on the collective experience of these experts. We call this approach: Succession. The Succession process begins with determining which Consularis, based on their background, is best suited to support the managing director. This is followed by the important Research Phase:
- Determining the wishes of the entrepreneur and the company.
- Analyzing the desired successor and the resulting profile.
- Choosing a transfer of management and/or ownership.
- Gaining insight into the possibilities and preconditions for the succession.
- Clarifying whether the succession can be handled independently of the business transfer.
- Advising the entrepreneur on how to structure the entire process.
- Internal and external communication regarding the succession.
- Jointly developing a plan.
- Developing a succession action plan.
- Supporting the entire process.
Own network
In many cases, existing networks of advisors, such as your own accountant, lawyer, and tax advisor, can be utilized. The Succession concept does, however, require collaboration between these parties. The Consularis is ideally placed to combine their coaching role with the role of coordinator of this process.
These results form the basis for determining the position of the managing director and the preconditions for transfer and succession. The Consularis guides the managing director in this process.
Action Plan
The initial investigation concludes with an action plan for the succession issue. The Consularis assists the managing director in implementing this plan. This allows the Consularis to coordinate the various advisors involved in the succession process.
The consular role continues after the actual transfer. It is precisely in the period after the “match,” when most advisors think “the job is done and our bill is paid,” that the risk of failure or (emotional) damage looms.
Even if immediate and complete transfer of ownership is chosen, the managing director usually remains involved with the company for a period. But in a different role: not as boss, but as advisor.
Managing Directors as Advisors
The role of advisor is usually not a natural fit for managing directors. They are often confronted with their successor, a “strange bird in a new nest.” No matter how carefully this successor is chosen and how competent they are, experience shows that this transition often leads to problems and frustrations.
Captain and Pilot:
Two captains on one ship doesn’t work. The former CEO should become the pilot, contributing ideas, not steering. During this period, the new captain must learn how to steer the ship optimally through new and sometimes turbulent waters, using his own ambition and talent, and with the help and knowledge of the experienced pilot.
New perspective.
The added value of a Consularis becomes particularly clear during this period. Succession isn’t a conclusion, but a beginning. The transition phase offers room for new blood, new insights, and ideas. The Consularis connects these new aspects with the qualities of the managing director and the company’s potential, creating genuine value enhancement. If these opportunities are optimally utilized, the managing director will benefit, as will their successor(s) and the company, which will continue with a new perspective.
Finally,
succession takes time. Determining the wishes, choices, and options of the managing director/major shareholder (DGA)
requires considerable attention to the emotional side of succession.
The above makes it clear that Succession is an extremely important topic. The
clock is ticking for many entrepreneurs. What are your proposed actions in this regard?
Please feel free to contact the Consularis Foundation (https://consularis.eu/contact/) or
contact one of the consulars directly via the website (consularis.eu) for an
introductory meeting.
