Business Transfer for SMEs around the Mare Baltic
SMEs are the driving force of Europe’s economy. Many SMEs face a crucial moment when the business gets transferred, e.g. due to retirement of the previous owner. In fact, more jobs are lost due to failed business transfers, than new jobs are created in start-ups every year. Existing companies conserve on average of five jobs whereas a start-up only generates on average two jobs. Every year, thousands of existing small businesses close down, as their owners retire or seek new challenges, but cannot find anybody to take over the firm. Ensuring a smooth handover is a long and sometimes complex process but making it simpler and more effective will reduce much of the ‘waste’ – lost skills, jobs, market presence and goodwill – associated with business closure. The 2011 EC’s study on “Business Dynamics”, measuring the impact of inefficient business transfers on job creation and business start-ups in Europe, concluded that Europe is losing approximately 150,000 firms each year due to inefficiencies of business transfers. In Germany it was estimated that around 240.000 successors are needed for 2019 only.
Over the next decade up to 500,000 businesses providing 2 million jobs will be transferred every year and at least 1/3 of business failures are the consequence of bad transfers. Against this backdrop it is essential to improve the conditions for business transfers. This holds especially true for the eastern BSR countries. In Estonia, Latvia, Lithuania, Poland and Russia most private companies have been founded in the early 1990s by 30-45 years old owners. The owners must now transfer their businesses in the coming years and they as well as other actors such as business organisations have hardly any experience with business transfers. The focus of business support in these countries was to create new companies, supporting growth and maybe export – but so far not on transfers. In all BSR countries the number and qualification of potential successors must be improved.
The majority of promotion programmes focuses on the creation of new firms, while the challenge of keeping firms running successfully is not covered. Therefore, the Baltic Sea Academy and the Hanseatic Parliament with 14 chambers, SME support organisations and universities from 10 BSR countries carried out the project “Innovative Business Transfer Models for SMEs in the BSR” from 2017 to 2021.
The aims of the project INBETS (www.inbets.eu) are to develop and implement a holistic funding approach, to examine, further develop and design innovative and transferable models and tools for facilitating SME business transfers, make them widely available and implement them in companies.
We cordially invite you to join us at the final workshop of the project on 19th March 2021 to learn more about the results of the project and how you can implement in your region.