Transferring a business is a crucial step for any SME owner in Switzerland. Several forms of business sale are available to entrepreneurs, each with advantages and disadvantages. The choice depends on many factors: the situation of the business, the owner's objectives and the specific conditions related to 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 helps preserve the family legacy and ensures the continuity of the business according to the values of the founders.
However, this choice is not without challenges. Emotional and legal aspects, such as inheritance advances or donations, require special attention. It is crucial that successors have the 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) consists of selling the company to an external third party. This form of transfer is generally faster, with an average duration of 12 months. It often allows you to obtain a higher sale price than other options.
Bringing in an external acquirer brings a fresh perspective and can revitalize the business. However, this method requires significant personal involvement from the seller, who must also manage the emotional aspect of selling 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-Buy-Out (MBO) is characterized by the sale of the company to one or more senior executives already involved in its operation. This method offers several advantages, including a climate of trust established between the seller and the buyers, as well as in-depth knowledge of the company by the latter.
This form of transfer also promotes the motivation of managers, as it recognizes their contribution. However, the transition from employee to owner is challenging. The entrepreneurial skills needed to manage the entire company must be carefully assessed.
Let's take the case of an SME in Switzerland, where the CEO wants to sell his company. 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 consists of organizing the cessation of the activity in a structured manner, selling the remaining assets to repay any debts and close the company.
This option is particularly common for businesses that are highly dependent on their owner, such as sole proprietorships. Although liquidation allows the business to end, it does not guarantee the sustainability of jobs or business partnerships.
Why anticipate your business transfer?
Anticipating the transfer process allows you to clarify the owner's personal and professional objectives. This provides the time needed to evaluate the different forms of business transfer and choose the one that best meets your expectations.
In addition, careful planning reduces the risk of conflicts or unforeseen events. For example, an entrepreneur wishing to opt for an MBO can identify and train potential executives well before selling his business.
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 different 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 support from experts are the keys to success.
Beginning this thinking well before retirement or departure from 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.
