Every year, more than 1,000 company owners in Saxony look for a successor to take over their business when they retire. Reason enough for the Saxon government to get involved, offering numerous measures. After all, successful succession planning keeps jobs and expertise in the region.

What will happen to the company when the boss retires? Saxon entrepreneurs should start looking for suitable successors as early as possible.

To encourage companies to relocate here and to maintain Saxony’s existing companies, the state government works in close cooperation with the Saxon Chambers of Commerce and funding institutes to help companies which plan to hand over the reins, and to provide potential successors with comprehensive assistance from the very beginning to implementation.

Even if it is not exactly certain when the transfer will take place, it is reassuring to know who to turn to with questions.

Information on succession planning can be found under “Contact”. Topics covered include rights and obligations, financing, taxes and contingency planning during the corporate succession process.

Comprehensive assistance for entrepreneurs, budding business founders and those interested in taking over a business

When you have built up a company yourself, it takes good planning, cooperation, commitment and perseverance to pass it on to a successor. The Saxon state government provides information, suggests initial points of contact and promotes a range of consulting services for corporate succession.

Under the SME Directive, entrepreneurs who are interested in taking over a company, SMEs which are preparing their succession planning, and budding entrepreneurs wanting to acquire a going concern can apply for funding from the Saxon Development Bank to get the advice they need. Other qualification courses can also be funded, e.g. on digitising business processes and protecting information.

It is not always easy to give away your life’s work. As well as the typical option of transferring a business within a family, it can also be managed by an employee or outsider. With its success stories and tips, the brochure on successful business succession in Saxony offers encouragement to companies passing through this difficult process.

Every year, the Free State of Saxony and stakeholders from the business world offer entrepreneurs a range of information events, seminars and expert discussion days throughout the federal state. The Saxon succession planning forum puts entrepreneurs in touch with various connections, points of contact and like-minded people.

If necessary, Bürgschaftsbank Sachsen GmbH and Sächsische Aufbaubank (SAB) offer companies with operating sites in Saxony help in the form of guarantees and capital participation when collateral is used to secure loans from their principal bank.

If the buyer lacks equity, the state can help with public-sector-funded equity capital as long as the project is economically viable. Business founders and companies investing in a Saxon site are eligible for Bürgschaftsbank Sachsen’s BoB programme, offering guarantees without a bank. This gives transferees letters of credit for up to 80 per cent of the loan, even without a financing bank.

The Free State of Saxony’s directive on regional growth facilitates business transfers by offering investment grants. Another option is offered by Sächsische Aufbaubank (SAB) as part of the federal project for the "Improvement of Regional Economic Structures".  
Business transfers can also be supported by means of (active and passive) minority stakes; this is offered, for example, by Mittelständische Beteiligungsgesellschaft Sachsen mbH, an affiliate of Bürgschaftsbank Sachsen. In 2016, it became easier to finance business transfers with more favourable conditions under the founding and succession programme for start-ups, young companies and business transferees. 
To make strategic acquisitions simpler in the SME sector, the WMS (Wachstumsfonds Mittelstand Sachsen Management GmbH & Co. KG), a project run by the Free State of Saxony and the Saxon savings banks, is involved in succession-related corporate takeovers. 

Picture credits: SMWA/David Pinzer