The role of intermediaries in the small business transfer process

Abstract

This is a post peer review, pre-copyedit version of an article published in the Journal of Small Enterprise Research, which has been uploaded to authors' institution repositories. For the final, proofread version of the article please click on the doi link below.

Relevance of Business Transfers as a Fundamental Pillar of Resilient Economies and Outline of Current Development Based on a Recent Survey

“…A business model developed by Van Teeffelen's highlights the great amount of preparation which needs to go into a business transfer (Bastié et al, 2018;Meijaard et al, 2005;Varamäki et al, 2014). Business owners have a wide variety of different options of how to transfer their business, ranging from transfer to a family member, to transfer to an employee to transfer to an external buyer (Battisti & Williamson, 2015;Meijaard et al, 2005;Molly et al, 2010;Ryan & Power, 2012). The success rate of business transfers is also highly dependent on the socio-economic environment in which they take place.…”

“…The literature on business transfers provides a lot of reasons and challenges to explain why over a third of business transfers fail (Alpeza et al, 2018;Deschamps et al, 2020, European Commission in Deschamps et al, 2020. The overall consensus is that business transfers primarily fail due to a lack of knowledge and a lack of affordable and accessible resources for business transfers (Alpeza et al, 2018;Battisti & Williamson, 2015;Van Teeffelen, 2012;Varamäki et al, 2014;Viljamaa et al 2015b). The reason for the lack of knowledge and expertise of business owners of business transfers is due to the fact that for most business owners, a business transfer is a "once-in-a-lifetime issue" (Van Teeffelen, 2012).…”

“…The reason for the lack of knowledge and expertise of business owners of business transfers is due to the fact that for most business owners, a business transfer is a "once-in-a-lifetime issue" (Van Teeffelen, 2012). Business transfers require unique knowledge and skills which are neither acquired nor needed during the every-day practice of running a business (Battisti & Williamson, 2015;Van Teeffelen, 2012;Varamäki et al, 2014;Viljamaa et al, 2015a). Business owners tend not to plan for succession and often postpone the transfer of their business as much as possible, making it difficult to find a suitable successor (Van Teeffelen, 2012;Varamäki et al, 2017).…”

“…Some scholars even argue that support of successful business transfers may be even more important for stable and sustainable economic growth than those of start-ups (Van Teeffelen, 2012). This is due to the significantly higher survival, turnover and profit rates of transferred businesses compared to start-ups, estimated between 35-50% for start-ups compared to over 90% for transferred businesses (Alpeza et al, 2018;Battisti & Williamson, 2015;Varamäki et al, 2014;Viljamaa et al, 2015a).…”

“…Moreover, the importance of business transfers is expected to increase over the next decade or so, due to the ageing populations of most European countries (Battisti & Williamson, 2015;Deschamps et al, 2020;Ryan & Power, 2012;Viljamaa et al, 2015b). Business transfers are particularly important for SMEs as they make up the vast majority of firms across Europe with nearly 98.7% of all firms being "classified as small firm" (Ryan & Power, 2012).…”