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In particular, (chain) specialty stores, discounters, and online retailers are putting pressure on traditional retail and have been leading to a steady concentration of market power among an ever-decreasing number of providers for years. This is accompanied by increasing pressure on margins.
According to retail researcher Jens Rothenstein, by 2020 approximately 70% of traditional retailers will have disappeared—or will have completely repositioned themselves. According to a study by IfH and HDE, the declining economic attractiveness of specialty retail is the biggest challenge in finding a suitable successor.
In the retail sector, therefore, succession planning requires particularly careful preparation.
Above all, positive business performance, ongoing review of one’s own business model, a high-quality product assortment, and the presentation of products in an appealing store layout, along with expert advice or special services, play a central role in finding a succession solution. Last but not least, motivated employees contribute to success. All of these factors combine to create a shopping
experience that builds customer loyalty. Modern business processes and payment systems, as well as the use of various sales channels (including online), round out the picture.
Ullrich Thiemann, CEO of the Lower Saxony-Bremen Retail Association, confirms this assessment: “While the consolidation process in the retail sector will continue, the diverse changes currently underway are opening up interesting market niches for small and medium-sized enterprises.”
If an intra-family succession plan is being considered, the successor’s competence, commitment, and willingness to take on the role play a central role. As an entrepreneur, one should be careful not to underestimate the often high level of emotional involvement and the associated potential for conflict in an intra-family solution, and should preferably seek professional support from an experienced business mediator.
Dr. Peter Achten, CEO of the North Rhine Trade Association, recommends professional succession consulting in every case to guide this highly complex process. From a reliable business valuation and a detailed prospectus to the targeted approach of potential successors—
candidates—including MBIs (external management buy-in candidates)—the successful search for a suitable successor requires a great deal of time and management expertise. Successful business transfers can easily take 12 months or longer.
As an entrepreneur, you should therefore always be aware that careful preparation of your succession plan not only secures your life’s work and your retirement, but also the future of your employees.
