06 September 2022
The "Business Transfer Club": for the transfer or takeover of a VSE / SME
EM Normandie Alumni
What is the "Business Transfer Club"?
Two graduates of the School, Aurélie CAILLE and Marie-Sophie VATINEL, respectively from the classes of 1993 and 1986, have launched the Business Transfer Club in collaboration with the EM Normandie Alumni Association. The official launch took place on Tuesday 9 November 2021.
This club aims to support EM Normandie Alumni in these major stages of their professional and personal lives. This meeting point allows them to exchange with Alumni who have already had experience in selling or taking over a company on best practices in this area.
How is the market for the sale of businesses in France?
Due to the evolution of the demographic curve in France and the ageing of its population, 500 to 800,000 businesses will have to be sold in the next decade.
There are nearly 4 million businesses in France, including 150,000 small and medium-sized businesses (10 to 250 employees) and only 6,000 businesses with more than 250 employees. More than a quarter of French employees work for SMEs. The remaining companies are microenterprises.
Every year, 50,000 SMEs are sold. In 70% of the cases, the sale is the consequence of the retirement of the manager, and 55% of them are sold within the original shareholder circle. This means that only 20,000 companies are actually for sale each year. Of these, 5,000 have more than 10 employees. In the end, the company takeover market generates only 5,000 transactions per year.
How to prepare to sell or buy a business?
Selling one's business is not easy. This action requires a great deal of confidentiality, which does not simplify the transferor's efforts to find the best buyer. It is estimated that between 60 and 70% of transactions are carried out within this "hidden" market.
SMEs play a major role in the French economy and employment. Ensuring that SMEs survive and are passed on over time is a real challenge. It is also a complex and often misunderstood process. Selling or buying a business is an important step in one's life and often requires good support. This process must be anticipated and organised well in advance.
Unfortunately, the decision to sell or take over a business often comes too late. For a company to be attractive when it is sold, it must prepare the sale, sometimes over several financial years, whether the buyer is a legal entity or an individual. In the same spirit, the buyer, as an individual, must prepare for his new position as manager. They must also provide themselves with the necessary finances by building up cash and taking out a 7 to 10 year loan with a bank to buy the business.
But above all, transferring or acquiring a business is above all a matter of trust. The seller must be convinced that the business he has helped to develop, or even created, has many more years ahead of it. The buyer, on the other hand, must be convinced that he or she is investing his or her savings, energy and professional and personal life in a project that is worthwhile.
Being the head of a company involves many responsibilities. The transfer of a business requires a certain amount of preparation and the gradual establishment of a climate of trust between the transferor and the transferee. The transfer of an SME is a long and complex project, involving professional, personal and financial commitments.