Company Succession in Practice – The Challenge of Generation Change

The study "Company Succession in Practice – The Challenge of Generation Change" is based on a survey of more than 1,300 Swiss SMEs. Twenty percent of the entrepreneurs who took part are planning to hand their company over within the next five years. In other words, an estimated 70,000-80,000 businesses in Switzerland are facing generation change between now and 2021. Moreover, the number of succession cases is likely to increase for demographic reasons over the next 15 years: Fifty five percent of SME entrepreneurs are currently aged between 50 and 65. The proportion of women in charge of SMEs is still low at 10%, although this figure has increased in recent decades. Even though 75% of all SMEs are currently family-run businesses, more than half of Swiss businesses are handed over to non-family members. According to the survey, in case of an internal family succession, the majority of SMEs would prefer to hand over ownership of the company to all descendants in equal shares, whereas there is a preference for passing on company management to the most entrepreneurially competent family members. In addition, SMEs opting for a family succession solution seek greater recourse to governance instruments such as shareholder agreements than SMEs that choose the path of non-family succession.