INBETS BSR

The project INBETS BSR enabled business support organisations to improve consultations in business transfer and ensure continuity in complex handover processes.

The challenge

A handover of small and medium-sized enterprises (SMEs) and change of ownership is a complex process. Many SMEs face a challenge when the business gets transferred due to various reasons. The observed tendency is that the failed business transfer causes more job loss than the creation of new jobs in start-ups. The failed business transfer implies also a loss of business running skills, market share, goodwill and more. This triggers the need in improving the conditions for business transfers and support of the potential successors. The observed situation is especially tricky for the eastern countries in the Baltic Sea region such as Estonia, Latvia, Lithuania, Poland and Russia. Most private companies established their businesses in the early 1990s, which means that the business transfer is in the near future. The focus of business support in those countries was to create new companies, supporting growth and maybe export – but so far not on transfer.

Such factors as lack of suitable successors, appropriate funding schemes, know-how deficits, lack of expertise and support from business organisations that could assist business transferees and successors have been identified. The understanding of these inefficiencies provides a framework for targeted measures that need to be taken to boost small businesses in their survival and prosperity.

The projects INBETS BSR wanted to strengthen the capacity of the existing SME business support organisations for business transfers and contribute to smoother business handover processes.

Budgets

INBETS BSR
in numbers

2.46

Million

Total
1.78

Million

Erdf
0.17

Million

Eni + Russia
0.00

Million

Norway

Achievements

Business transfer better understood

INBETS BSR initially developed a self-assessment tool that allows to evaluate suitability of an entrepreneur to take over a business, and introduced six innovative business transfer models. The models are foreseen for business support organisations that would need tailored assistance to the potential business successors. The targeted business support organisations were challenged by the project to embrace the entire transfer process, from the initial identification of the handover need, the dialogue between owner and successor, overall evaluation of a firm, consultations on transfer models and available funding schemes.

Transnational patterns and collaboration

Thanks to INBETS BSR, business support organisations and training facilities are now better equipped to support SMEs in their business transfers. For countries like Lithuania, Latvia, Estonia, Poland and Russia, these support structures were new. In other involved countries, such as Germany, Denmark, Finland and Sweden, the project improved the existing structures like some initial support for businesses. In any case, this is the first time for the region that a transnational exchange has taken place in the field of business transfers. The nine participating countries in the region shared best practices and created concrete solutions such as tools and trainings for SMEs and support organisations. Together, they have improved the qualifications of the transfer coaches and developed missing funding instruments. They also ran individual consultations with companies, in which the trained project partners prepared these companies for an upcoming change or accompanied them in an ongoing change.

Upscaling business transfer challenge to a political level

Besides, the project developed political support programs and shared them with decision-makers. The recommendations include specific actions to support “women-successors” and to support the inclusion of migrants as much as possible, but also guidelines when choosing existing employees as successors or specialists who have migrated abroad. These recommendations triggered lively exchange at the political level, for example at the strategic planning forum of the regions and cities of Russia in 2020 or during the project’s final conference in 2021.

Outputs

Valuation tool

The valuation tool is particularly helpful for the owners and potential successors to estimate the company's value before starting negotiations or asking for a loan if needed. With this tool, especially small companies and possible successors can create the first analysis of their financial needs, which can help them to finance the succession.

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Train the Trainer Program

The project developed, tested, evaluated and finalised a program to train the consultants of business support organisations and other institutions. The aim of the training was to familiarise the trainees with consulting and promotion of business transfers. This approach would improve the skills needed to become permanent qualified business transfer coaches. For example, these new coaches are now able to run consultations with SMEs.

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Entrepreneurship Training

The project developed a 562 hours comprehensive training course for entrepreneurship students and potential business successors (buyers, sellers, heirs). The course is structured in 3 modules, which makes it easier to exchange, and lasts about 18 hours. All modules focus on the development of skills and competencies needed for a successful business transfer process, as well as learning the basics of business transfer and practical solution scenarios. The training covers individual modules that were adopted and incorporated into the existing courses. Module 1 is about determining the competitiveness of companies and developing strategies, module 2 is on the legal environment and business transfer logistics, and module 3 contains the financial optimisation in business transfers.

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