swisspartners and Red Speics have joined forces to offer takeover solutions to entrepreneurs involved in the succession process. By combining operational expertise, asset structuring and tax skills, the two companies aim to provide an integrated response to the growing complexity of business transfers.
What motivated the partnership between Red Speics and swisspartners? And what is the real strategic benefit for entrepreneurs planning their succession today?
The partnership is based on asimpleobservation.An entrepreneurcannot cover all the dimensions of a succession on his own, including tax, legal, inheritance and asset management aspects. Developing this expertise in-house would be too time-consuming.
swisspartners already has solid expertise in these areas, but without any real operational depth at the company level. This is precisely where our contribution comes in. By combining our expertise, we go beyond a simple juxtaposition of services to offer a truly integrated approach. swisspartners covers the tax, fiduciary and wealth management dimensions, while I provide an operational reading of companies, i.e. their structure, operation and strategic positioning.
Why do many entrepreneurs still underestimate the complexity of a succession process?
Taken individually, the various elements are not particularly complex. It's their combination over time that creates the difficulty. Many entrepreneurs refer to a mental milestone - often retirement at 65 or 67 - and don't start to think about it until they're approaching that deadline.
In reality, the thinking should start much earlier. Decisions are often put off for years and then, once taken, the process is rushed. Succession involves identifying a suitable successor, structuring the financing, clarifying ownership issues, and integrating inheritance, property and customer relations.
There is also a human dimension. The designated successor has to make the transition from employee to entrepreneur, taking on responsibilities and often incurring debts. What's more, some managers cut back on their investments at the end of the process, which can weaken the company. So it's not an isolated factor, but the combination of strategic, financial and human dimensions that makes the process complex.
When should an entrepreneur realistically start planning for succession? And what are the risks of starting too late?
Ideally, planning should begin seven to ten years in advance. There are no hard and fast rules, but this timeframe allows you to explore different options and prepare in a structured way. When entrepreneurs start too late, they often find themselves dependent on a single scenario - for example, an internal successor - without considering alternatives. And even when a successor is identified, there is no guarantee that he will ultimately accept the role.
Succession therefore requires several scenarios. The most obvious options remain selling to a third party or passing on the business to the family, but none of these can be taken for granted. Without sufficient time, flexibility diminishes and the risk of poor execution increases.
You make a distinction between a "sellable" and a "transferable" business. What are the key differences between these two concepts?
These concepts differentiate the way in which a business is transferred. A "transferable" business is taken over internally, by a family member or an employee. A "sellable" business is sold to an external party. The main difference lies in the information and risk involved. An internal successor knows the company, its customers and its challenges. An external buyer has to analyse all these elements from the outside, which increases uncertainty.
This uncertainty is directly reflected in the valuation. External buyers incorporate more risk and use structured methods such as multiples or discounted cash flows. Internal transfers are more relationship-based, but often present financing challenges, with buyers generally dependent on banks or the seller himself. The process, valuation and future role of the founder therefore differ significantly.
What factors, beyond the figures, are most often underestimated?
The most underestimated factor is the ability to let go. Many entrepreneurs think they can pass on ownership while retaining control, for example through a majority shareholding or strong operational involvement. In practice, this often leads to dysfunctional situations. For a transfer to work, you have to accept that the business is evolving, that decisions are changing and that mistakes can be made. This detachment is all the more difficult when the company has been built up over several decades. And yet, without this step, a succession cannot be fully successful.
More and more businesses are facing succession issues, while fewer and fewer family members are prepared to take over. How is this changing the market?
Entrepreneurs have to accept that passing on their business is no longer a foregone conclusion. In the absence of internal successors, companies have to position themselves as attractive targets for external buyers. This development also creates opportunities, particularly in terms of consolidation. Several companies can be brought together to improve efficiency, pool costs or strengthen their technological capacity. However, this requires a clear strategic vision and often external mediation. Many companies remain fragmented for historical or personal reasons, whereas a merger would make sense. Entrepreneurs therefore need to align their business with market standards and open up to broader strategic options.
How is the partnership between Red Speics and swisspartners changing the approach of entrepreneurs?
The aim is to offer an integrated and independent approach. Entrepreneurs don't need theoretical advice, they need people who understand their reality and can credibly challenge them. This requires experience and pragmatism. The aim is not to impose solutions, but to encourage reflection.
The process is built up in stages. Even if a company is quickly understood, it takes time to build trust. It's a matter of accompanying the entrepreneur, asking the right questions and gradually structuring the decisions. Ultimately, this approach means that both the business and the private assets can be prepared in a coherent way for the next phase.