The transfer of businesses, particularly SMEs, is one of the major challenges of the economic prosperity of the European Union and subsequently for the Belgium economy, which relies on its SME’s.
Over the next decade the number of businesses that will change hands will be forever on the rise. This creates many challenges and opportunities for potential buyers.
The Brussels-Capital Region is rich in SMEs. According to figures from BeCeFi, more than 37,000 businesses will change hands in Brussels in the next 10 years. The transmission or transfer of businesses is also accentuated by the aging population. Today, 31% of Brussels entrepreneurs are over 50 and 12% over 60.
Moreover, if 75% of Belgian SMEs are family businesses, transmission to a family member is not always guaranteed. As shown in a study by the European Commission, more and more companies in Europe are transferred to third parties.
Unfortunately, starting an independent business through the takeover of a company is less and less popular. In Belgium, acquisitions have almost halved over the last 10 years. Indeed, budding entrepreneurs say they prefer to start their own business, largely for reasons of freedom and creativity, but also for financial reasons.
This gap must be filled by stimulating and facilitating the acquisition process, and also by implementing the necessary tools for its success.
Indeed, corporate acquisition has many benefits. Buying a business instead of starting a business from scratch is an "easier" and more secure solution than creating a new activity.
The company already has a reputation and market as well as a customer base, not forgetting possible unexploited opportunities. The knowhow that is retained thanks to a buyout is important, even if a restructuring in envisaged.
The financing of the acquisition can be made easier since recent financial results are at hand. For a required sum equal to the creation of a new activity, the elements to persuade are more difficult to meet (market research, competitive analysis, letters of intent, ...).
Revenue is immediate, as opposed to creating a business where revenues generated at startup are often low or even zero.
The survival rate after 2 years is higher in the case of an acquisition rather than a startup.
For buyers and sellers, their relationship is one of the most difficult aspects of acquisitions. There are thousands of companies that must be acquired each year, yet it is difficult for a buyer candidate to identify these companies. This is where consultancies such as Buyout Management can make a significant difference. The main difficulty? Companies refuse to say they are for sale. According to a recent study, word of mouth (46.8%) remains by far the most used method to find a buyer.