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But those who put off succession planning for too long risk seeing their company lose its structure and appeal. This often happens unnoticed and long before the planned retirement.
The quiet withdrawal begins sooner than you might think
What happens when succession is postponed? Often, this process begins gradually. You no longer maintain your network as actively, you no longer approach new customers with full energy in sales, and major investments—such as in new machinery or staff—are put on hold. Even young professionals notice when a company stops growing. The drive for innovation wanes, and the company becomes less attractive. Yet it is precisely during this phase that it would be particularly important to convince potential buyers.
Many business owners do not have a family-based solution. For them, an external succession is often the only realistic option. Yet the search for a suitable successor is significantly more challenging today. The ideal candidate—often envisioned as a 30-years-younger version of oneself—has become the exception.
Fewer and fewer young people are willing to shoulder the responsibility and entrepreneurial risk of a business takeover. The market has changed and is now strongly shaped by the buyers’ perspective. Therefore, a structured plan is necessary, accompanied by professional support. Only in this way can suitable prospective buyers be approached and realistic purchase prices be achieved.
Think Through the Project from the End
The transfer of a business is not a single step, but rather a lengthy strategic process. Ideally, this process can be divided into five phases to ensure that all important aspects are carefully addressed.
Phase 1: Strategic Succession Planning
The first step is an honest assessment of the current situation. This involves not only the business but also your own personal goals and aspirations:
When is the right time for you personally to step back?
How much financial security do you need for your retirement?
Which succession model fits your life? A one-step sale? A phased handover? A management buyout?
These considerations form the basis for all further decisions. When you know your goals, you can plan your path toward them effectively.
Phase 2: Increasing Value and Preparing the Business for Sale
Now it’s time to view your business from the perspective of potential buyers. The goal of this phase is to address known weaknesses and structurally optimize operations.
Reduce reliance on the owner: Deliberately delegate responsibility, establish a second level of management, and strengthen the operational team.
Systematize processes: Document workflows, create transparency, and demonstrate that this business can function successfully without you.
Streamline finances: Clearly separate personal assets (such as vacation properties) from the core business, simplify structures, and create clarity.
These measures increase the value of your business, make it more stable, and simultaneously enhance its appeal to potential buyers.
Phase 3: A Well-Founded and Realistic Business Valuation
A professional valuation report does not provide fantasy figures, but rather a reliable assessment of what is achievable in the market. Established methods such as the income approach or the DCF model are used for this purpose. This valuation serves as the basis for all subsequent discussions with prospective buyers.
Especially in a market heavily influenced by buyer interests, thorough preparation is essential. This includes transparent figures, a realistic framework, and a compelling presentation of the company’s potential.
Phase 4: The Actual Sales Process
Executing the sale requires a great deal of experience and attention to detail. It involves several steps that must be carefully planned and coordinated:
Preparation: Creation of an anonymized brief profile (“teaser”) and a detailed sales prospectus (information memorandum).
Buyer Search and Outreach: Discreetly identifying and specifically approaching potentially suitable buyers. A strong network and experience are crucial here.
Due Diligence: The phase of intensive review by the buyer. This is where it becomes clear how thorough the preliminary work really was and whether the agreed-upon price holds up.
Negotiations: Clarification of the purchase price, contract details, liability issues, and warranty terms. Good preparation is the key to viable agreements.
Phase 5: Transition Management—the Often-Underestimated Final Step
The sale of a business does not end with the signing of the contract. Only when the handover to the new owners has gone smoothly can the succession be considered a success. Employees, customers, and business partners must be able to develop trust in the new leadership.
A well-thought-out handover plan ensures continuity and secures the company’s future viability. It is the final—and perhaps most important—building block in the entire process.
Why an Integrated Approach Is So Important
Succession planning is not purely an economic or legal matter. It touches on many areas simultaneously: tax issues, legal frameworks, emotional aspects, strategy, and communication. Those who plan only selectively or work with individual consultants run the risk of overlooking important connections.
A holistic, integrated approach ensures that all relevant disciplines are involved early on and that all stakeholders are on the same page. This saves time, avoids conflicts, and significantly increases the reliability of the transaction.
Your Final Major Entrepreneurial Task
Planning your own succession is perhaps the most challenging business decision of your life—and at the same time, the most personal. It requires strategic foresight, structured thinking, and the courage to embrace change.
But it is also a great opportunity: You can actively guide your life’s work into the next generation, set the course for a successful future, and at the same time create new freedoms for yourself.
The most difficult step is often the first: taking an honest look at your own company. Where does it stand today? And how does it appear through the eyes of a buyer? Anyone who asks themselves these questions has already begun to actively shape the future.
