Transferring a business is a crucial step for any SME owner in Switzerland. Several forms of sale of business There are several options available to entrepreneurs, each with its own advantages and disadvantages. The choice depends on many factors: the business's situation, the owner's goals, and the specific conditions associated with each option. Let's examine the main forms of business transfer.
1. Business transfer within the family: Family-Buy-Out (FBO)
Family buy-out (FBO) is a popular option for family businesses. This method involves transferring the business to one or more family members, often direct descendants. It preserves the family legacy and ensures the continuity of the business, reflecting the values of its founders.
However, this choice is not without challenges. Emotional and legal aspects, such as inheritance advances or gifts, require careful consideration. It is crucial that successors have the necessary motivation and skills to take over the business. Family conflicts can complicate this process.
For example, an entrepreneur may consider transfer your business to their children on advantageous terms. However, a rigorous legal framework, including precise contracts, is essential to avoid any misunderstanding.
2. Sale to an external third party: Management-Buy-In (MBI)
Management buy-in (MBI) involves selling the business to an external third party. This form of transfer is generally faster, with an average duration of 12 months. It often allows for a higher sale price than other options.
Bringing in an external buyer brings a fresh perspective and can revitalize the business. However, this approach requires significant personal involvement from the seller, who must also navigate the emotional side of handing over their business to an unknown person or entity.
Furthermore, information asymmetries between the seller and the buyer can cause uncertainties. Support from an expert in business transfer is strongly recommended to avoid such pitfalls.
3. Sale to senior executives: Management-Buy-Out (MBO)
Management buyout (MBO) involves selling a company to one or more senior executives already involved in its operations. This method offers several advantages, including a climate of trust established between the seller and the buyers, as well as the latter's in-depth knowledge of the company.
This form of transfer also promotes managerial motivation by recognizing their contribution. However, the transition from employee to owner is challenging. The entrepreneurial skills needed to manage the entire business must be carefully assessed.
Consider the case of a Swiss SME, where the CEO wishes to sell his business. By opting for an MBO, he can transfer his responsibilities to an experienced employee. However, financing the buyout often constitutes a major obstacle for buyers.
Liquidation: cessation of activity
When neither family transfer nor sale to executives or a third party is an option, liquidation is a solution. This method involves organizing the cessation of business in a structured manner, selling off remaining assets to repay any debts and closing the company.
This option is particularly common for businesses that are highly dependent on their owners, such as sole proprietorships. While liquidation allows for the termination of the business, it does not guarantee the continued existence of jobs or business partnerships.
Why anticipate your business transfer?
Anticipating the transfer process allows you to clarify the owner's personal and professional goals. This provides the time needed to evaluate the different forms of business transfer and choose the one that best meets your expectations.
Furthermore, careful planning reduces the risk of conflicts or unforeseen events. For example, an entrepreneur considering an MBO can identify and train potential managers well before selling their business.
The key steps for a successful business transfer
To successfully transfer your business, it is essential to follow certain steps:
- Company Rating: determine its market value and its strategic assets.
- Analysis of options: choosing from the different forms of business transfer the one that best meets the needs of the transferor and the business.
- Legal and tax preparation: ensuring that all legal and tax aspects are in order.
- Communicating with stakeholders: Involving employees, partners and successors in the process to ensure a smooth transition.
Conclusion on business transfer
Every entrepreneur must carefully evaluate the various forms of business transfer to choose the one that best meets their needs and those of their company. Whether through a Family Buy-Out, a Management Buy-Out, a Management Buy-In, or a liquidation, careful planning and expert support are the keys to success.
Beginning this process well before retirement or leaving the company offers the best chance of a successful transition. Whatever your goals, consider surrounding yourself with professionals to ensure your entrepreneurial legacy is preserved.
