Question 1

When should I start planning?

Accepted Answer

Ideally, strategic preparation should begin around 5 to 10 years before the intended handover date, or even up to 15 years beforehand in exceptionally complex cases. Business succession is not simply a matter of age, but an ongoing part of strategic risk management. A comprehensive Business Emergency Dossier should therefore be in place from the very first day of running the business. The earlier structural, tax and financial preparations begin, the greater the room for manoeuvre and the more efficiently the subsequent process will run.

Question 2

Why do I need a business succession adviser if I already have fiduciary and accounting specialists?

Accepted Answer

Fiduciary and accounting specialists provide indispensable expertise in taxation and financial reporting. Succession planning, however, involves much more: managing the overall process, mediating between generations, finding buyers, coordinating lawyers and banks, and providing emotional support when it is time to let go. A neutral business succession adviser acts like a mountain guide. Rather than competing with your existing fiduciary and accounting specialists, they bring all the specialists around one table to avoid duplication and coordinate their work efficiently.

Question 3

How long does a typical succession process take from start to finish?

Accepted Answer

Including preparation, the valuation phase, the search for a buyer, contract negotiations and the gradual induction of the successor, the active project generally takes between two and five years. The contractual and financial completion alone usually takes six to twelve months. A structured 5-phase plan helps keep this long journey manageable and predictable.

Question 4

How much does professional succession advice cost?

Accepted Answer

The cost depends on the scope of services required. An initial orientation workshop to assess the starting position (the “Compass”) or the preparation of a Business Emergency Dossier is usually offered at a transparent fixed price. Depending on its complexity, comprehensive support throughout the process under an advisory engagement is structured around a monthly fee or a combination of a fixed fee and a performance-related component (success fee).

Question 5

What happens if I am unexpectedly unable to work tomorrow?

Accepted Answer

Without clear arrangements, small and medium-sized enterprises (SMEs) risk being unable to act if their owner-manager suddenly becomes unavailable. A digital Business Emergency Dossier provides for this emergency. It works like an emergency bivouac in the mountains: all vital passwords, banking powers of attorney, deputising arrangements and legal documents are stored securely on a server. This enables the designated key people to keep the business operational at all times.

Question 6

What qualifications does your network bring to the process?

Accepted Answer

A neutral business succession adviser works with a carefully developed, interdisciplinary network drawn from the Swiss business community. This includes specialist M&A lawyers, tax experts, notaries, commercial mediators and SME financing specialists. The right expert network is assembled to meet the specific requirements of each case and bring the project to its destination efficiently and on a sound legal footing.

Question 7

How do I find the best succession option for my SME?

Accepted Answer

The choice between a transfer within the family (FBO), a sale to existing employees (MBO), to external management (MBI) or to a strategic investor depends on the owner’s personal goals and the structure of the SME. A structured analysis (“Route Planning”) examines all options impartially, weighs up their advantages and disadvantages, and assesses their cultural and financial fit.

Question 8

What role do emotions play in a business handover?

Accepted Answer

The psychological aspect is often underestimated in the succession market. Letting go of your life’s work, acknowledging your own mortality and handing responsibility to someone else, particularly within the family, often create unconscious barriers. When communication stalls, structured succession mediation acts as the “Knot Resolver”, helping to unravel emotional entanglements and refocus attention on an objective solution.

Question 9

Why do many transfers within the family (FBO) fail?

Accepted Answer

The most common reasons are unclear roles, insufficient qualifications on the part of the successor, or unspoken expectations between siblings. If private roles around the kitchen table are not kept separate from business roles in the company, the process becomes blocked. An external, neutral adviser is crucial here to distinguish clearly between family dynamics and business realities and to develop a binding family charter.

Question 10

Can I stay with the company after the sale?

Accepted Answer

Yes. A structured transition period in which the former owner advises the successor is often expressly welcomed. What matters is a clear separation of roles, set out in the contract: the predecessor must let go of day-to-day operations so that the successor gains the team’s full acceptance. Coaching during this period (“Acclimatisation”) supports the outgoing owner-manager in the demanding task of finding their new role.

Question 11

When and how should I tell my employees about the succession?

Accepted Answer

The timing needs careful consideration. Inform people too early and you create uncertainty; inform them too late and the workforce feels overlooked. Ideally, communication should take place once the contracts have been signed in a legally binding manner and the successor has been officially confirmed. A clear communication plan alleviates fears, secures the team’s loyalty and guarantees business continuity.

Question 12

How is confidentiality protected during the sale process?

Accepted Answer

Discretion is paramount to avoid unsettling employees, customers and competitors. Before any sensitive company data is disclosed, a strict confidentiality agreement (NDA, Non-Disclosure Agreement) is signed with every prospective buyer. Initial discussions are also often conducted anonymously using a “blind profile” (teaser).

Question 13

What is an indirect partial liquidation?

Accepted Answer

This is one of the greatest tax risks when selling a Swiss company limited by shares (AG) or limited liability company (GmbH). It can arise when a private individual sells their shares to a company, such as a holding company, and the acquired company uses assets not required for its operations, such as accumulated profits or cash, within five years to finance the purchase price. For the seller, the private capital gain, which would otherwise be tax-free, is then retrospectively reclassified as taxable income (a dividend). Obtaining a tax ruling at an early stage protects against this risk.

Question 14

What is meant by transposition?

Accepted Answer

In Swiss tax law, transposition occurs when a private individual transfers shares in an operating company they control to another holding company they also control, receiving consideration in return, such as a credit to their current account or a cash payment, that exceeds the nominal share capital plus the transferred company’s reserves protected under the capital contribution principle. This transaction artificially converts taxable income into a tax-free capital gain and is added back to taxable income by the tax authorities.

Question 15

Does it make sense to establish an acquisition holding company?

Accepted Answer

In most cases, yes. An acquisition holding company offers the buyer significant financial and tax advantages. It allows the purchase price to be financed through the holding company and the interest on the acquisition loan to be offset against the operating company’s profits for tax purposes. Future dividends from the operating company can also be distributed to the holding company largely tax-free, thanks to participation relief, to repay debt.

Question 16

Which legal form is best for succession?

Accepted Answer

Legal entities such as a company limited by shares (AG) and a limited liability company (GmbH) are ideal for succession. They can be transferred as a whole to a new owner straightforwardly through a share deal, meaning the sale of the shares. With a sole proprietorship, however, the handover is considerably more complex, as every asset, every contract and every machine must be transferred individually (an asset deal). It often makes sense to convert a sole proprietorship into an AG or GmbH in good time before succession.

Question 17

What is the difference between an asset deal and a share deal?

Accepted Answer

In a share deal, the shares or equity interests in the legal entity, such as an AG or GmbH, are sold as a whole with all associated rights and obligations. This is the most common form for SMEs. In an asset deal, by contrast, only specific business assets, such as machinery, property, the customer base or patents, are separated from the company and transferred. The two options have major differences in their tax and legal implications for both buyer and seller.

Question 18

Who is liable for legacy liabilities or warranties after the sale?

Accepted Answer

This is negotiated in detail in the purchase agreement. The seller usually gives the buyer certain representations and warranties, for example regarding the accuracy of the balance sheet, outstanding tax audits or legal disputes. To minimise the risk for both sides, part of the purchase price is often held in a blocked account (escrow account) for an agreed period.

Question 19

What happens to my existing contracts, such as leases and customer contracts?

Accepted Answer

In a share deal (sale of shares), all contracts of the AG or GmbH automatically remain in place because the contracting party, the legal entity, remains unchanged. An exception applies where “change-of-control” clauses have been agreed that grant a right of termination when ownership changes. In an asset deal, however, the contracts must be transferred individually to the new owner, requiring the explicit consent of each respective contracting party.

Question 20

How do I find the right financing?

Accepted Answer

The optimum financing structure is almost always tailor-made. In practice, it rarely consists solely of the buyer’s own equity. A combination of bank loans, vendor loans or earn-out models (performance-related purchase price payments) is usually chosen. Working with specialist financing experts, we assess which structure will safeguard the SME’s long-term affordability and liquidity without placing an excessive financial burden on the successor.

Question 21

What does retirement planning have to do with business succession?

Accepted Answer

A great deal, because SME owners’ business and private assets are usually closely intertwined. A large proportion of their retirement provision is often tied up in the value of the business. Personal financial and retirement planning must be coordinated with the succession process. This is the only way to ensure that the sale proceeds are sufficient to maintain the owner’s accustomed standard of living in retirement and to make full use of opportunities for tax optimisation.

Question 22

How is the actual value of my business determined?

Accepted Answer

The value of the business is not the same as the eventual purchase price; rather, it provides an objective economic basis. In Swiss SME practice, the Swiss practitioners’ method, which combines net asset value and capitalised earnings value, is very frequently used. Depending on the sector and business model, the discounted cash flow method (DCF) or multiples-based methods may also be used. An independent valuation builds trust among all parties to the negotiations.

Question 23

What is meant by the valuation trap (“valuation gap”)?

Accepted Answer

A valuation gap is the difference between the outgoing owner’s price expectations and those of the prospective buyer or financing bank. While the owner often factors in the business’s historical emotional value and their life’s work, the buyer primarily assesses future earnings and risks. Neutral facilitation and objective valuation methods help to close this gap successfully.

Question 24

What is an earn-out model, and when does it make sense?

Accepted Answer

An earn-out is a contractual arrangement under which part of the purchase price is paid at a later date and depends on future business performance, such as achieving certain revenue or profit targets. This model makes particular sense when future prospects are difficult to assess or the parties’ price expectations are far apart during negotiations.

Frequently asked questions about business succession

Planning & process

Succession options & emotions

Law & taxes

Financing & valuation