1) A survey of Flemish business owners over age 55 found that less than half expect a family succession, and many micro-enterprises have not begun succession planning. 2) The survey also found that starters who acquire existing businesses see advantages like existing customer bases, while growth companies undertake acquisitions to access new markets or staff. 3) However, starters are less likely to consider acquisitions than growing their own businesses, and financing acquisitions is perceived as more difficult than starting new ventures.

1. Business Transfers in Flanders:
What can we learn from it ?
VLAIO WEBINAR

2. INTRODUCTION
Business Transfer Barometer
- Insights for government to
update sme policy
- Inspiration for business support
organizations and advisors to
tailor their services

3. OVERVIEW OF THE PRESENTATION
• Introduction
• Business Transfer Survey 2019
• Do starters and growth companies
differ in their views on take-over?
• 8 findings from the 2019 surveys
• Conclusion

4. BUSINESS TRANSFER SURVEY 2019
Business Transfer in Flanders 2019
Research project carried out with the support of
Agentschap Innoveren & Ondernemen
Promoters: Prof.dr. Eddy Laveren
(Antwerp Management School)
contact: eddy.Laveren@uantwerpen.be
Prof.dr. Tensie Steijvers
(Universiteit Hasselt)
Dr. Ine Umans
(Universiteit Hasselt)

5. BUSINESS TRANSFER SURVEY 2019
Business Transfer Survey 2019
Introduction
• Business transfer is one of the biggest challenges for every company
• It is crucial to be well-prepared for such succession
• Objectives of the survey: To what extent are companies involved in succession planning?
Which information channels are being used? Which problems do they encounter during
the succession?
• Online questionnaire sent to Flemish SMEs with a CEO/managing director over 55 years
old

6. BUSINESS TRANSFER SURVEY 2019
Online survey: 489 responses
40.50%
59.50%
Size
SME Micro Company

7. BUSINESS TRANSFER SURVEY 2019
Online survey: 489 responses
82.80%
17.20%
Family character
Family Firm Non-Family firm

8. BUSINESS TRANSFER SURVEY 2019
Online survey: 489 responses
59.70%
27.60%
12.70%
Age Managing Director
55 - 60 years 61 - 65 years Over 65 years old

9. BUSINESS TRANSFER SURVEY 2019
Online survey: 489 responses
15.60%
20.50%
28.30%
35.50%
Sector
Industry & Agriculture Construction
Commerce & Hospitality Service

10. % of respondents that believe to pass
on the leadership of the company
within ............ years
BUSINESS TRANFER SURVEY 2019
2019 2015
In 0 to 2 years 20,8% 18,5%
In 3 to 5 years 39,4% 39,4%
In 6 to 10 years 28,5% 29,1%
>10 years 5,5% 2%
Unknown 5,9% 11%

11. % of respondents that believe to
pass on the ownership of the
company within ............ years
BUSINESS TRANFER SURVEY 2019
2019 2015
In 0 to 2 years 23,2% 15,3%
In 3 to 5 years 27,3% 22,5%
In 6 to 10 years 17,2% 18,2%
> 10 years 4,5% 4,5%
Unknown 27,8% 39,5%

12. Planning of the business transfer BUSINESS TRANFER SURVEY 2019
Transfer of leadership
Total sample Subgroup: time to transfer < 5 years
Not yet working on the planning 26,5% 19%
First steps has been taken 16,7% 15,2%
Transfer of ownership
Total sample Subgroup: time to transfer < 5 years
Not yet working on the planning 38,4% 17,5%
Aware, but no idea how to start 14,1% 13,6%

13. Planning of the business transfer BUSINESS TRANFER SURVEY 2019
Transfer of leadership Micro-enterprises SMEs
Not yet working on 33,9% 16,5%
First steps has been taken 19,3% 13,3%
Fully occupied 43,3% 68,1%
Fully completed 3,5% 2,1%

14. Future succession scenario: family
succession vs. external sale
BUSINESS TRANFER SURVEY 2019
2019 2015
Family succession 40,7% 58,7%
External sale 47,7% 32,4%
Liquidation 11,6% 8,9%

15. Future succession scenario: family
succession vs. external sale
BUSINESS TRANFER SURVEY 2019
Company Size
Micro-
enterprise
(N = 176)
SME
(N = 143)
Family
succession
34,7% 50,3%
External sale 44,3% 49%
Liquidation 21% 0,7%

16. Information sources used (transfer < 5 years)
BUSINESS TRANFER SURVEY 2019

17. BUSINESS TRANSFER SURVEY 2019
Discussion with a successor or another party?
• 90% has discussed the transfer of leadership/ownership with at least one other party  Strong increase
compared to 2015 (73%/65%)
• Most important parties with whom the transfer is being discussed: accountant (76%/79%);
potential successors/acquirers (70%/67%); family shareholders (49%/50%); advisors company succession
(47%/52%)
• 25% of respondents who plan on transferring the leadership within 5 years has not yet discussed the
transfer with the potential successor/acquirer
This figure increases to more than one third, when transferring the ownership is taking into account.

18. Constraints with planning the business
transfer
BUSINESS TRANFER SURVEY 2019
Constraints with planning
the business transfer
Leader-
ship
Owner-
ship
Financial reasons 21,1% 23,8%
Unfavourable market
conditions
21,2% 23,2%
Lack of knowledge 14% 17,3%
Administrative reasons 15,8% 13,1%
Family reasons 18,1% 11,4%
Reasons linked to a
candidate
16,9%
Duration of the preparation 21,7%

19. What will be the role of the CEO after the business transfer ?
BUSINESS TRANFER SURVEY 2019
17%
22%
24%
50%
70%
Take on a caring mentor role
Take on a PR-function
Take a seat in a BoD
Advising the company
More spare time

20. STARTERS AND GROWERS SURVEY 2019
Take-over survey within a selection of
Flemish starters and growth companies
Research project carried out with the support
of Agentschap Innoveren & Ondernemen
Promoters: Prof.dr. Eddy Laveren
(Antwerp Management School)
Contact: eddy.Laveren@uantwerpen.be
Prof.dr. Tensie Steijvers
(Universiteit Hasselt)
Dr. Ine Umans
(Universiteit Hasselt)

21. STARTERS and GROWERS SURVEY 2019
Do starters and growth companies differ in their views on take-over?
Introduction
• A take-over is less risky than starting up a new business. The success rate of take-overs is much higher
than those of newly founded businesses.
• Central research question: To what extent do starters and growth companies realize that a take-over is
a possibility to start?
• Online survey among 225 starters and 182 growth companies.

22. How many starters have done or
have considered a take-over?
STARTERS AND GROWERS SURVEY 2019
Starters
Have done a take-over of an
existing business
12,4%
Have considered a take-over by
starters who have started up a
new business
15,2%
Proportion of starters who have
completed a take-over and/or
have considered one
25,8%

23. How many growth companies have done
or have considered a take-over?
STARTERS AND GROWERS SURVEY 2019
Growth companies
Have done a take-over of an
existing business
26,9%
More fast-growth
companies have
completed one or
more take-overs
Have ever considered a
take-over
64,6%
Proportion of growth
companies who have done
a take-over and/or have
considered one
67%

24. Advantages of acquiring an
existing business?
STARTERS AND GROWERS SURVEY 2019
By starters who have considered a take-
over
Existing customer base 71%
Certainty about turnover 40%
Presence of knowledge/expertise 36%

25. Motives for growth through a
take-over
STARTERS AND GROWERS SURVEY 2019
Motives for growth through a take-
over
Complementary products/services
51%
Access to new markets 43%
Staff of the acquired business 35%

26. Reasons why no take-over was realized
STARTERS AND GROWERS SURVEY 2019
Starters Growth companies
No suitable business found 53% Difficulties regarding the valuation 37%
Too risky 33% Lack of time 30%
Difficulties regarding the valuation 33% Too risky 27%

27. Channels to get in touch with the acquired business
STARTERS AND GROWERS SURVEY 2019
Starters who have done a take-over Growth companies who have done a take-
over
Family/Friends 33% Network of fellow entrepreneurs 72%
Network of fellow entrepreneurs 22% Take-over mediators or advisors 27%
Matchingplatform 18%

28. Problems experienced during the take-over process
STARTERS AND GROWERS SURVEY 2019
Starters Growth companies
No problems experienced 36% No problems experienced 33%
Too little transparency by selling party 36% Difficulties with integrating of processes and
administration 33%
Complex regulation 32% Problems with the valuation 23%
Take-over process took longer than expected 28% Too little transparency by selling party 18%
Take-over process was more complex than expected 28% Resistance by staff of acquired business 16%

29. Is financing of a take-over more
difficult than financing a new
business?
STARTERS AND GROWERS SURVEY 2019
Starters who have
founded a new business
Starters who have
done a take-over of
an existing business
More 11% More 4%
Less 4% Less 59%
No difference 6% No difference 18%
No opinion 78% No opinion 18%

30. How many growth companies
experienced problems of
financing a take-over?
STARTERS AND GROWERS SURVEY 2019
Financing problems experienced by
growth companies
No problems 63%
Just a few problems 31%
A lot of problems 0%
No opinion 6%

31. Knowledge of the supply of services
supported by the Flemish
government?
STARTERS AND GROWERS SURVEY 2019
Starters Growth
companies
Information
sessions
68% 69%
Training 77% 68%
Advice 82% 87%
Coaching 73% 83%
Online tools &
checklists
75% 55%

32. How many firms participated in
activities of suppliers of services?
STARTERS AND GROWERS SURVEY 2019
Starters Growth
companies
Information
sessions
50% 41%
Training 49% 39%
Advice 58% 78%
Coaching 44% 64%
Online tools &
checklists
36% 12%

33. Aspects of business transfer
where support is needed
STARTERS AND GROWERS SURVEY 2019
Starters Growth
companies
Fiscal aspects 70% 69%
Legal aspects 59% 69%
Financial aspects 56% 53%
HRM 35% 23%
Valuation of the
company
19% 39%
Stages of the
take-over process
12% 33%

34. 8 important findings
1. Less than half the family firms expect a family succession
2. The transfer of leadership and ownership is prepared mainly practically – especially
micro-enterprises wait to do so
3. Acquiring does not seem attractive to starters …
4. … but who starts via an acquisition, sees advantages
IMPORTANT FINDINGS

35. 8 important findings
5. The motives why starters and growth companies do an acquisition, do not differ all that
much
6. Who acquires, grows faster
7. Starters who acquire an existing business and founders of a new business have a different
perception of the different ways to financing an acquisition
8. Starters and growth companies use different channels to search for potential acquisition
targets
IMPORTANT FINDINGS

36. Flanders’ Integrated Policy on Business Transfers
letter of Minister to entrepreneurs 55+
RAISING AWARENESS
GIVING INFORMATION
peer-to-peer learning in small groups
PREPARE
18%
AFTER
IMPLEMENT
ads in newspapers and on radio
Business Transfer Week (last week of October)
information package + website
information sessions + webinars + free consult
training package (4 sessions)
grants for advise and coaching
business transfer plan
coaching of successor

37. INTEGRATED POLICY:
• raising awareness
• giving information
• training, peer-to-peer learning, advise, coaching
• fiscal stimuli
• loans warranted by government
GOVERNMENT IN PARTNERSHIP WITH:
• business support organizations
• private consultants
CONTINUITY:
• every year again
Flanders’ Integrated Policy on Business Transfers
Success factors of
Business Transfer Week

38. Patrick Jordens
Flanders Innovation & Entrepreneurship
Flemish Government, Belgium
Mobile: +32 497 59 33 69
E-mail: patrick.jordens@vlaio.be
Twitter: @generatiewissel
Flanders’ Integrated Policy on Business Transfers
More information

39. Business Transfers in Flanders:
What can we learn from it ?
VLAIO WEBINAR