Business Succession Under Special Circumstances
Finding the right business is no easy task for a prospective buyer. The size and structure of the company are of crucial importance. In addition, understanding the business model is essential to ensuring that the takeover proceeds as smoothly as possible. In the case of planning firms—such as architectural firms, construction management companies, or building equipment suppliers—these aspects are particularly important.
This industry differs from others. “The owners are almost without exception engineers and are often deeply involved in day-to-day operations,” says consultant Karl-Heinz Seidel (see interview below). So if the potential successor wants to be actively involved in the company’s day-to-day operations, an engineering background is an advantage.
However, a takeover may also be possible for businesspeople or lawyers under certain circumstances. In this case, it is important that the company possesses the relevant technical expertise and well-functioning structures to minimize the risks for the buyer.
3 Questions About Business Succession
Karl-Heinz Seidel, managing director of Seidel Business Consult, knows what to look out for in particular during a sale.
DUB UNTERNEHMER Magazine: What makes a planning firm a good candidate for a takeover?
>>Karl-Heinz Seidel: A company is ready for a takeover if the owners have realized in good time that they need to make themselves dispensable. There should be a structure in place within the office where responsibility for various tasks is distributed among several people, and employees can cover for one another, at least to a limited extent. This also means that there should be employees who can mentor and lead their colleagues. One thing is clear: This requires a certain company size and a minimum number of employees.
DUB UNTERNEHMER Magazine: What steps do you take to prepare a company for a takeover?
>>Karl-Heinz Seidel: The figures in the financial statements, the business analyses, and the financial projections form the basis. They are important indicators of the office’s performance. I put myself in the buyer’s shoes and take their considerations and calculations into account. Once the situation is assessed, action must follow: This is always guided by the specific circumstances and varies from firm to firm. As a general rule, however, the firm’s processes should be transparent and traceable. Responsibility for tasks should be clearly assigned and, as far as possible, distinct from other tasks. The goal is to organize and manage the firm’s work according to modern principles.
DUB UNTERNEHMER Magazine: How does your engineering background benefit you when advising clients?
>>Karl-Heinz Seidel: As an engineer, I understand the language—but especially the mindset—of engineers a little better than others. I’m familiar with the planners’ environment, the market, their clients, and numerous firms in Germany. All of this helps me understand the specific business at hand and steer the desired developments accordingly.
