COMB publishes new research report

The third research report "The owner-managers and the transfer of ownership," states that half of the owner-managers, who face having to leave their company within the next two years, have a plan for what to do.

05/09/2016

Almost half of the owner-managers in our survey indicates that a succession must begin within five years. Additionally, one fourth expects a business transfer within 5-10 years, and only one third do not expect to begin the transfer of ownership within the next 10 years.

Unfortunately, a large part of the owner-managed businesses, are not yet ready for sale. This also applies to the owner-managers, where a change of ownership is very urgent. The lack of preparation is costly for the company, the owner-manager and ultimately also for the employees. Furthermore, it is important that the owner-manager is conscious and aware of the business' value. In some cases, a sale or a succession is very urgent, and an insight into the company's economic value will be an advantage for the further process. More than a third of the owner-managers do not know the value of their own business.

This is revealed in the third report under the title "Owner Management in Denmark", prepared by Professor Morten Bennedsen and Professor Kasper Meisner Nielsen. The report is based on a survey of 13,539 owner-managers. Among other things, the report covers the owner managers' biggest challenges in planning the change of ownership: their attitude on how the change of ownership and old age are related, clarification of the business' economic value, as well as speculation about what the owner-manager should do afterwards.

The report examines:

  •     How far owner-managers are in their planning of the succession
  •     What their plans include
  •     Communication, advice and the planning factor
  •     Challenges in the planning process
  •     The clarity factor and valuation

The figures in the report show among other things that very few owner-managers have a clear valuation. One third do not know what the business is worth, and among the other owner-managers the valuation is primarily based on the owner-manager's gut feeling. Many business sales are not successful because the buyer and the seller cannot agree on a price. The better the seller can document the price he or she wants for the company, through an external or internal valuation, the better he or she will do in a negotiation with a potential buyer.

Read the full research report here PDF icon"Ejerledelse i Danmark - Ejerlederne og ejerskiftet" (report only available in Danish)

Read previous research reports here

Contact Centre for Owner-Managed Businesses in email comb.eco@cbs.dk if you want a printed copy of the report.

The page was last edited by: Centre for Owner-Managed Businesses // 10/08/2019