The current political and economic situation is also impacting entrepreneurial succession for businesses.
Business founders as well as strategic buyers and financial investors are consciously incorporating uncertainties and risks arising from rising financing costs, from high inflation, increasing equity requirements, ESG requirements, fragile raw material supply chains, the increasing significance of the creditworthiness, worsening skills shortages, increasing bureaucracy and current geopolitical crises into their decision-making. They are becoming more cautious. The start-up rate is dropping noticeably. It has halved.
Demographic developments in Western countries are also contributing to this: There are not so many potential business buyers available anymore. The serious potential buyers can cherry pick their desired company. We are in a buyers’ market. The realization that value does not equal price becomes apparent here.
Prospective buyers want profitable companies with a stable management underpinning and low dependence on their owner. The latter leads to an increase in the average size of brokered companies. Prof. Dr. Holger Wassermann, co-editor of the Nachfolgemonitor Deutschland and partner of the Deutsche Unternehmerbörse, sees that already today only every sixth company can be mediated and points to the further worsening demographic curve and the increasing trend for the mediation of companies.
This makes it all the more important to prepare companies for their placement quickly and in a targeted manner. The focus of this preparation should be on measures that contribute to owner independence and increase resilience. In addition, in a buyers’ market, it is particularly important to organize a structured bidding process to establish a certain negotiating position for sellers.