EUROCONSIL considers discretion to be a critical success factor in business succession. Only discretion ensures that business operations continue smoothly and, thereby, that the company’s value remains stable. The risks arising from a breach stem from the interests of stakeholders, which third parties (e.g., competitors) sometimes exploit in a calculated manner. Specifically:
Employees
Job security and satisfaction address employees’ fundamental needs. Especially in small and medium-sized businesses, the entrepreneur’s direct influence on the company culture and business success is crucial.
If an impending change in ownership becomes apparent, this sense of security is disrupted, weakening employees’ loyalty to the company. This makes it easier for competitors to poach them. However, good and motivated employees are essential to a company’s success.
The Customers
The business owner is the guarantor of the company’s value proposition and trust in the brand. This stable pillar is now facing a change. This trust suffers particularly in the case of project-based business, products that require explanation, high-priced items, or premium-quality products. Questions about reliability (timing, quality, warranty, price, etc.) arise.
To safeguard their own service delivery, customers explore alternative supplier relationships, making it easier for competitors to gain a foothold. Payment behavior may also deteriorate, or the company’s solvency may be called into question. The latter undermines the willingness to make advance or partial payments.
The Suppliers
Reliable solvency, a sustainable business relationship, and stable processes are in the suppliers’ best interest. This predictability gives way to uncertainty about whether the business relationship can be maintained under new management.
The tendency to turn to other or new customers when capacity is fully utilized is growing. Uncertainties also arise regarding solvency (key question: “…does he have to sell?”), which can lead to adverse effects on delivery terms and payment terms.
The Risk
Indiscretions can therefore have a detrimental effect on market success. The company then loses its appeal, its value and selling price decline, and in some cases, a company may even become unsellable. Leaks can thus be deliberately exploited to the detriment of a company. Not every expression of interest is backed by a serious intention to buy; it may simply be a search for “cheap” advantages.
The larger the circle of those with intimate knowledge, the greater the risk that employees, suppliers, and customers will become aware of it. This risk can sometimes even arise from within the circle of closest confidants—whether out of ignorance, a lack of caution, or even with intent.
The Solution
EUROCONSIL recommends reaching out anonymously to a broad audience and conducting open discussions only with a carefully selected group of individuals, protected by a confidentiality agreement. In our experience, the advantages of anonymity and confidentiality clearly outweigh the potential disadvantages of narrowing the circle of interested parties.
EUROCONSIL therefore always advises its clients to exercise the utmost caution, provides proven measures and processes, and acts, so to speak, as a “firewall.” This effectively reduces disruptive external influences. However, it’s impossible to do without trust entirely!
