Demographic change means that not only many skilled workers are about to retire. But also many bosses. A survey conducted by the German Confederation of Skilled Crafts (ZDH) in 2020 showed that around half of business owners are 55 or older: About half of the business owners are 55 years and older. Every fourth person is over 60 years old.
The ZDH assumes that up to 125,000 trade businesses will be handed over to new owners in the coming years. The skilled crafts sector therefore needs not only motivated skilled workers but also suitable people to take over the businesses.
There are various forms of business takeover:
- You buy the whole company.
- The owner gives it away, for example within the family.
- You lease the farm.
- Or you can pay a pension to your predecessor for life.
Most owners would like to pass on their craft business within the family. 12 percent plan to have their employees take over the business. For 35 percent of those surveyed, the succession to the business has not yet been decided. Would you like to become self-employed? But don't want to start a new business? Then you have a good chance of finding a suitable business in the coming years.
Whether you want to build something yourself or take over an existing business. These personal and professional tools contribute to the success of your idea:
- You like to take responsibility, get stuck in and make goal-oriented decisions.
- You like to learn and bring commercial knowledge with you.
- You have financial resources and a lot of energy and time that you put into your business. Your family situation also allows you to take over the business.
- You work in a disciplined manner and have good time management skills.
- You can handle stress and a heavy workload.
According to the Deutsche Handwerks Zeitung, most start-ups are new businesses. This is due on the one hand to demographic change and on the other hand to the fact that succession must be planned at a very early stage. Taking over a business has a number of advantages.
When you take over an existing craft business, it is already established in the region. That means:
- You take over an operation that is ideally already up and running.
- People know what services you offer.
- The employees are trained and experienced.
- There is already a solid customer base.
- There are also existing processes, such as for materials procurement or accounting.
- Operating inventory, vehicles, operating premises - all this is already available.
- There are many numbers and data that you can use to judge the profitability.
Self-employment initially means a lot of freedom to make decisions. When you take over a company, things are a little different: Be prepared to adapt to ingrained structures and procedures. There are many habits in the workforce that you can't immediately throw overboard.
Other challenges include the following:
- You need to take over the existing workforce.
- Existing customers may turn to another company.
- You are taking a financial risk and also need to keep regulatory requirements, taxes, liabilities and liability risks in mind.
Before you start searching online or in industry gazettes: Get clear about what you are looking for.
How big should the company be? In which industry are you looking? In which region? How big is your budget?
If you know what you want, you can get started on your search. And that is here:
- Company exchanges of the chamber of crafts, guild or trade association
- Business succession exchange nexxt-change.org
- Deutsche Handwerkszeitung or similar trade journals
- Company brokers
In parallel, get advice from professionals for business takeovers. You will find suitable contacts at the chambers of crafts and crafts associations.
Once you have discovered an operation that meets your rough criteria, get into the thoughtful analysis. Look for answers to the following questions:
- What is the reputation of the company?
- What does the market look like? How high or low is the competitive pressure?
- What is the location? Can the business stay there or would you have to move with it?
- Take a look at the balance sheets and income statements: Is the company in a stable economic position and, above all, is it fit for the future?
- What is the composition of the workforce? Are there older, very experienced female employees as well as young employees who are on board for the long term?
- What is the condition of the premises, vehicles, machines, etc.? How much money would you still have to invest?
- How high is the purchase price? Does it match the profitability of the business? That is, can you make a long-term and sustainable profit with the business?
A business plan is not only helpful for a start-up, but also for a takeover. It gives you a lot of clarity about your goals, upcoming measures and the development potential of the business. If you want to apply for financing or funding, you will also need it.
In addition to the business plan, you should develop a detailed roadmap for the handover. Do this together with the previous owner. Then they will be well prepared on their first day as the new boss.
A generational change is imminent in the skilled trades. This is a great opportunity for young, motivated skilled workers: In the coming years, many skilled crafts businesses will be available for takeover. The most important thing when it comes to business succession is to find out about it early on, analyze the business in detail and take a step-by-step approach.
