Business Transfers – Lithuania, Europe, INBETS

Have you ever wondered that in Lithuania many businesses were established at the beginning of the dawn of freedom in 1990s, so they have been operating for about 30 years already! We can be proud that many businesspeople have managed to cultivate solid and stable businesses that ensured a steady income and created stable jobs for Lithuanian citizens. A handful number of Lithuanian businesses have successfully expanded in Europe and other international markets, grown their capacities, have been successfully sold or their shares have been traded on the stock exchange, however, many of them continue to operate in the hands of the same owners. Keeping in mind their age, many of businesspeople are or will be facing the dilemma of business transfer and continuity in the near future.

This topic will become especially relevant for family businesses that, for one reason or another, have not developed a business successor within the family. There are many reasons for that – first of all, not every child wants to follow their parents’ footsteps. Without a proper successor, there is a need to attract professionals from the outside and even think about selling the business. Audrius Zabotka, an expert of business transfers and succession, says: “Looking inside of successfully developed businesses, we see that there is no one-fits-all scenario – some business owners transferred businesses to successors, others relied their business development on outsourced professionals. In any case, every family business founder had to address the question of how to ensure the continuity of the business – entrust its management to family members, who could and would like to further expand it, or, perhaps, sell the business to unrelated buyers. And such an issue will have to be addressed in the coming years by many family businesses set up in the early days of restoration of independence in Lithuania. There is no one right answer what to do in this situation because each business situation is individual and unique. However, in order to keep a business running successfully, it is necessary to identify the issue of business transfer and this issue must be perceived by the business owner as a significant and task that need a lot of focus and timely decisions.”

“Preparation for business transfer is not a few days job – a properly planned and implemented business transfer process can take 3-5 years. After all, to prepare a business for sale or transfer, it is necessary to properly arrange and prepare not only documents and administrative part, but also business processes. If a potential business successor lacks the necessary competencies, it is expedient to create a training and education plan, find a business transfer form suitable for both parties, transfer the accumulated experience, know-how, contacts, etc.,” notes A. Zabotka.

In a time of economic crisis caused by pandemics, business owners and managers must first and foremost address the issues of business liquidity, continuity and survival issues. However, the development of a business transfer strategy should not be postponed to the distant future, as life is full of surprises, and sometimes, unfortunately, unpleasant ones. Imagine that the sole owner (shareholder) of a business, as well as the manager of a company, dies unexpectedly. If he or she was the only person authorized by the company in state institutions, as well as the only person with the right to sign documents, then the business will face high survival issue, as legal inheritance proceedings can take up to 3-6 months. In that case only one question matters –will business be able to survive for such long period without the head of the company, without the possibility to conclude or adjust contracts, make transfers in banks, fulfil their obligations to suppliers and creditors, pay salaries to employees, etc.

Over the next decade, 500,000 businesses in the European Union will face business transfers each year. Those businesses are creating jobs for more than 2 million Europeans. Unsuccessful or failed business transfers cost not only for business owners and their families, workers, but also for states, as lost jobs increase rates of unemployment, increase the need for social benefits and reduce tax revenues.

In 2011, European Commission published “Business Dynamics” study, where was estimated that 150,000 companies with 600,000 employees are being lost in Europe each year as a result of failed business transfers. It is worth to mention that business transfer in the European Union has already become acknowledged as essential issue and has some targeted funding. The project “Innovative Business Transfer Models for Small and Medium-Sized Enterprises in the Baltic Sea Region” (INBETS BSR), funded by the EU Interreg Baltic Sea Region Program, is one of the examples of such funding and one of the first focus point in Lithuania. The project is being implemented with partners from countries around the Baltic Sea region (lead partner – Baltic Sea Academy (Germany)) with two partners from Lithuania – Vilnius Chamber of Commerce and Industry and Vytautas Magnus University. “Vilnius Chamber of Commerce, Industry and Crafts unites more than 500 businesses, including family businesses. Seeing the problem of business continuity in Lithuania and the lack of due attention to it, the Chamber was actively involved in the implementation of the INBETS BSR project, which aims not only to develop the most effective models of business transfer, but also to contribute to the business support system, which is needed to better identify and understand business transfer issue and purposefully fund its solutions, ” notes the Vilnius Chamber of Commerce, Industry and Craft general director dr. Almantas Danilevičius.

– Written by the Vilnius Chamber of Commerce, Industry and Crafts

 

Who can help

Business transfer institutions Lithuania

Info LEU

Public Institution Lithuanian Business Support Agency (LBSA) is a non-profit institution established by the Ministry of Economy for the purpose of administering European Union (EU) support and co-financing funds. As the executive institution in the structure for the administration of EU funding in Lithuania, LBSA administers EU funding granted for the development of Lithuanian business, R&D, tourism, and the energy sector.

Business transfers can be also financed by commercial banks, credit unions, investment firms and other financial or credit institutions.

“Invega “ (National promotional institution) through the application of innovative and effective financing models and instruments designed to provide financial and other services to businesses. Invega manages financial instruments designed to help with starting up or expanding a small or medium-sized business, i.e. soft loans, loan guarantees, interest rate subsidies, and support for the first job. The Entrepreneurship Promotion Fund instrument offers the best conditions for newly established and young businesses. Invega cooperate with the banks, that grants loans from the Open Credit fund towards for business development (both investment and working capital loans). Invega also helps facilitate access to finance for SMEs by guaranteeing to financial intermediaries the repayment of up to 80% per cent of the first loan part. The bank secures the repayment of the remainder of the loan with collaterals offered by the enterprise

Through the subsidy schemes (Global Grant measures). Invega subsidise for companies portion part of the interests paid. Businesses can make use of the opportunities offered by the Interest rate subsidies instrument to cover up to 95% per cent of the interests paid on loans both guaranteed and not guaranteed by Invega.

Support for the First job provided for employers companies on the employees who employed for the first time, workers with no prior work experience. may be reimbursed some of the salary costs Part of the salary costs associated with the first-time employed young person (up to 23.3 per cent from the salary calculated). are reimbursed.

Special support programmes for training and mentoring on including business transfers topics, are not available in Lithuania eitheramong subsidy measures administered by INVEGA, however such mentoring/training topics are not so popular yet.

Invega is the main public investor into the private equity, venture and early stage capital funds. Invega also has the daughter company UAB “Kofinansavimas”, that is managing several Co-investment funds, investing alongside business angels into start-ups and growing SMEs, commercialisation of ideas generated in scientific and research institutions through the implementation of research, development and innovation (R&D) activities.

Financial support can be received only for general business consultations according to EU structural assistance measures. But they are targeted at other aims of business development more.

A certain proportion of EU structural assistance is used to finance public services for business.

Agency for Science, Innovation and Technology (MITA) 
It is the main governmental institution, responsible for implementation of innovation policy in Lithuania.

MITA provides free of charge services for clients from business, science and public sectors, interested in possibilities to develop strong cooperation relations with international partners and get financial support for research and innovation projects.

The main activity is the coordination of national activities and international programmes (HORIZON2020, EUREKA, EUROSTARS) of research, technological development and innovation and other financial schemes (innovation vouchers, protection of industrial property rights). MITA provides national financial support for projects participants.

MITA also promotes business and science cooperation, commercialization of research and protection of intellectual property rights.

Public Company “Versli Lietuva“(Enterprise Lithuania) has been playing a considerable role in business consultations and search for business partners. It is a non-profit agency under Ministry of Economy established to promote entrepreneurship, support business development and foster export. Enterprise Lithuania is a reliable adviser and assistant for start, growth and export of national businesses with focus on SME’s.

Below is a visual respresentation of the Regional business transfer support cooperation structure – Structure – Info LEU

Cases from Lithuania
STORY: SPIRA IS TAKING OVER HAIR SALON BEATA Sirpa is 33 years old and lives in an average-size town in Sweden. She had been employed as a hair stylist for many years. Ever since her school days, Sirpa has played with the idea of becoming the owner of her own hair salon. Now that her children are old enough to go to school, Sirpa and her spouse agreed that it was time to test out her dream.Suddenly an opportunity arose! Sirpa´s employer, Kalle, in the hair salon Beata, wanted to retire. Kalle wondered if Sirpa would want to take over the business. This opportunity created many thoughts for Sirpa; should I start my own new business, or take over an existing salon? What would the difference be?“I really want to start from scratch to design my salon with my style and logo. On the other hand, I could start faster if I take over the existing business. If I start a new salon, I would need to find a location, buy everything, design it and plan it. I do not know if I can do this all by myself. Also, I already know that the existing business has an experienced accountant who is familiar with the business. Would I need a permit?”After taking time to reflect, Sirpa felt that buying the Beata Salon would give her a head start. This head start was worth more to her than the opportunity to design her own salon. With this decided, Sirpa then had new questions; how much would it cost to buy the business? Can I take out a business loan? Her employer had another employee; how would he react if I become the boss? Will he want to change jobs? If he leaves, could he take many of the regular customers with him?Sirpa has a good relationship with her boss, Kalle, and he helped her resolve some of her questions. Since Kalle is retiring, there was no risk that he would take away customers or employees. The other employee was enjoying his job; so he would most-likely stay even if Sirpa would buy the salon.The price Kalle offers was approximately the same as what Sirpa would need to spend on inventory and decorating a salon. Sirpa received help from an accountant to check the salon’s accounts; they realized that Kalle’s price is a reasonable valuation. The offer Kalle made was for Sirpa to acquire the assets of the company. This means that Sirpa would start her own new business, which would acquire Kalle’s inventory, agreements, and employees, without buying shares in Kalle’s company. This offer made it easier for Sirpa to understand what she was buying; she could continue to run the business without being responsible for any commitments that Kalle’s business had made previously.Before meeting with a bank, Sirpa worked on her business plan for several evenings so that she would be well-prepared. Her plan included a long-term vision for how the salon would become what she wanted it to be. The meeting at the bank went well. She answered all of the bankers’ questions, and a loan was approved to allow her to buy the business. LESSONS FROM SIRPA Taking over an existing business is like buying an existing house versus building a new house. With a new house, you can choose a design, style, floorplan, and layout, but it will take time to build. Additionally, there are some uncertainties. For example, you don’t know how the area will be developed, whether the ground is ideal for construction, and how resistant the new construction will be to weather and wind for the coming decades. In contrast, an old house already has resolved any construction problems. You can also argue that it is more environmentally sustainable to buy an existing house instead of building a new house. The same is true with businesses. Instead of buying new inventory, you can take over an existing inventory like Sirpa did. If the company transfer allows the employees to continue in their jobs, like in Sirpa’s business transfer, it´s also socially sustainable.Sirpa had a close relationship with the person who sold the business, which is common in business transfers. She was able to ask Kalle to remain in the business for some time after she took over to learn more from him. If Kalle had not retired, Sirpa would have needed to stipulate in the purchase agreement that Kalle could not start a competing business for a certain number of years. The price that Kalle asked for was not very high, so the risk involved in taking over the business was low. However, it could take some time for Sirpa to make the salon become the way that she wants it to be, since she did not choose the employees, location, branding, customers, etc.During a business transfer it is also important to take into consideration whether the current owner has any valuable knowledge or important contacts that have not been shared. For example, the salon’s success might depend on Kalle’s reputation for dying hair or styling hair for weddings. Similarly, the salon might depend on, for example, an accountant who is a close friend of Kalle, and might disappear when Kalle leaves. TIPS! Buying a business can be a shortcut to starting a business Bring outside help to appraise the value of a business Talk with your family about what the business will mean for everyone Take time to assess the current owner’s incentives: why does the owner want to sell the company, and what will the owner do after the sale? Consider whether there are important intellectual assets in the business that only exist in the current owner’s knowledge or contacts Prepare thoroughly before visiting a bank […]
STORY: BURIM IS LOOKING FOR A SUCCESSOR Burim was working as a department head at a bank in Sweden, and dreamed of creating something on his own. He was constantly thinking of new business ideas, but he did not feel that he had found “the right idea” yet. He decided to not wait for the perfect idea, but act on one of the ideas that he had. This action would help him learn and also show him whether he likes running a business or not. Burim decided to open an “Escape Room” team-building park that includes technical challenges. He planned to run this business for a few years, then change to do something else. Burim involved two friends in his business idea; Leon and Pär. Together they wrote a business plan and a partnership agreement, and it was fairly easy for them to receive a loan from a government program to build their concept. It was the beginning of a journey with a series of challenges, where each challenge is more difficult than the previous ones. The absolute hardest challenge was finding a plot of land that would work for their purpose. After much searching, they finally managed to convince a company called Svea Skog to accept their business idea and lease some land. Once the business got started, it was far more difficult than the friends could have imagined. They needed to learn to write computer code, solder electronics, build rooms, and cook for customers. After a year of many long days and late nights, it was finally ready (six months later than planned)! When they launched the business, it became popular. They received many bookings from all of southern Sweden, and the first two years went extremely well. They continued to face challenges and work long hours, but they also had fun, earned money, and felt passionate. In the third year however, Leon decided to continue his military career in the foreign service. Additionally, Pär announced that they were expecting children. Burim and Pär decided to continue with the business, but the third year became difficult. Burim needed to do more of the work since Pär needed more family time. Burim had always been interested in eventually selling the business, so when his motivation and energy started to run out, he brought up the topic of selling the company with both of his partners. Pär was completely willing to sell, but Leon was not. Their discussions eventually focused on the stipulation in the partnership agreement that clearly stated that if any single partner decides that he wants to sell, then all of the partners must sell. Reality was not as simple as the partnership agreement. Leon thought that it would be foolish to sell now when the business was going so well; he wanted to wait longer. They were still friends, so Burim did not want to involve legal courts in their dispute. After a long discussion process, they agreed to sell. The first potential buyer offered a lower bid than what they themselves had invested. Pär wanted to take this bid. He just wanted to be done with the business. Burim and Leon did not want to lose money, so they rejected this bid. The next potential buyer was a friend. After learning more about what it takes to run the park, the friend realized that he lacks the skills. He would not be able handle the technology, servicing, and maintenance. This was the kind of knowledge that Burim, Pär, and Leon had developed over the three years. At last, Burim talked with one of the park’s suppliers. He seemed interested, as he already owned a similar park and understood the systems that the park uses. They received a bid that was a little higher than the money that they had initially invested. This bid would not pay for all of their hard work during the last three years of growing their business. Despite this disappointment, they decided to sell. They sold the company as a limited company, thus selling all of the shares. This type of sale involves two problems: First, the three partners are still personally liable for the bank loan, which the current sale agreement would not resolve. Secondly, they are also liable for the lease agreement. Despite this, they decided that they trust the buyer and that this offer was their best option. A year after they sold the business, they managed to transfer the bank liability and lease agreement to the new owner. LESSONS FROM BURIM Burim and his partners had a challenging and evolving journey that they had not fully anticipated when they started. Their partnership agreement was legally binding, but once it was put to the test with friends, relationships and feelings affected them more than they expected. It is important to keep this in mind when writing a partnership agreement, especially when the partners are friends. Sometimes there are also things that cannot be negotiated away in business agreements. In these cases, both sellers and buyers need to trust each other, and trust their instincts. Furthermore, Burim, Pär, and Leon realized that a specific skillset is needed to run their company, and it was not easy to find potential buyers who had that skillset. There is no doubt that it is easier to sell a company when few processes depend on the sellers’ unique knowledge. If Burim and his partners would have had more time and planned the business transfer earlier, they could have started to transfer their own knowledge by training personnel, writing processes, documenting decisions, adding machines, suppliers, etc., and thus simplified the process of finding a buyer. Regarding the price, the three friends were initially disappointed because they felt that their time and effort in building the company deserved a higher price. It is common to think like a seller; however, the buyer will most likely not have the same point of view. The buyer often values the company based on other factors, especially on future potential instead of past effort. So, there is really only one right price; how much the buyer is willing to pay, and the seller is willing to accept. TIPS! Try to plan the business sale early Transfer knowledge and processes within the company Build trust with potential buyers Remember that the seller and buyer have different perspectives, which both affect the sale price Think carefully before deciding to create a business with close friends. The meaning of the partnership agreement can change over time […]
Business Successors Training 1.INTRODUCTION INBETS BSR aims to examine, further develop and design innovative and transferable models and tools, facilitating business transfers of small and medium-sized enterprises (SMEs), make them widely available and implement them in companies. One of the main tools to achieve these goals is Business Successors Training Educational Program, which aims to provide the knowledge and capacity building of those with business practices or business education necessary for the successful management of business transfer processes, in order not only to keep existing SMEs but also to increase their market value through innovative, successful business growth. 2. AIMS AND OBJECTIVES Vytautas Magnus University, one of INBETS BSR partners, developed this Business successors education training program for business successors (buyers, sellers, heirs), which consists of 3 separate modules lasting a total of 18 hours. All modules focus on the essential skills and competencies necessary for a successful business transfer process, highlight the basic issues of business transfer and their practical solution scenarios, and allow participants to choose training modules that meet their needs. The first step of this program adoption is to test it with a target group, so that at least 30 people would be trained for business succession, and receive their feedback on the satisfaction with: the organization / educational institution for the module(s), the trainer’s skills / competences for the module(s), personal benefit for the module(s). This implementation report presents the results of the first testing of Business Successors Training Education Program, which was carried out on 20-22 of October, 2020. 3. PARTICIPANTS The target groups of Business Successors Training Educational Program are: Entrepreneurs: company / business owners, shareholders, company employees Students (with basic entrepreneurial knowledge), Graduates (from different levels and fields), Private and public sector employees seeking in-service training or retraining. Since the target group is wide, the registration for the training was carried out using Google Forms, so that it would be widely available for everyone who is interested in participation of testing of a new training program. The testing of Business Successors Training Educational Program attracted 67 participants in total. Participants’ list is attached as Annex 1 to this report. 4. IMPLEMENTATION The testing of Business Successors Training Educational Program was carried out as follows: 2020 October 20 – testing of the Module 3 “Financial optimization in business transfer” (lecturer Arturas Kapitanovas, 6 academic hours, 52 participants – 18 present and 34 online via Facebook live stream); 2020 October 21 – testing of the Module 1 “Determining the competitiveness of companies and developing strategies” (lecturer Nerius Jasinavicius, 6 academic hours, 29 participants – 14 present and 15 online via Facebook live stream); 2020 November 22 – testing of the Module 2 “Legal environment and business transfer logistics” (lecturers Sergej Butov and Kestutis Adamonis, 6 academic hours, 25 participants – 11 present and 14 online via Facebook live stream). Each training day started with a welcome word and presentation of INBETS project from prof. Vytas Navickas, who is the project manager of INBETS at Vytautas Magnus University. The participants were introduced to the main goals of the project as well as some visual information, available on the official project website https://inbets.eu/, followed by a presentation of lecturers, who were responsible for the first testing of Business Successors Training Educational Program. Training agenda is attached to this report as Annex 2. At the end of each training day Vytautas Magnus University has served the certificates of attendance to all the participants (106 certificates to 67 participants in total) and collected the feedback regarding each testing in order to assess the need for revision of the training (example of the certificate attached to this report as Annex 3, example of filled in evaluation form attached to this report as Annex 4, photos of the trainings attached to this report as Annex 5, training material attached to this report as Annex 6). Since the testing of training was carried out during the global Covid-19 pandemic, every testing session was translated live on Vytautas Magnus University Facebook account, which can be found here: https://www.facebook.com/VDU.svietimo.akademija. The information about the Business Successors Training was presented on Vytautas Magnus University website and social media accounts (Facebook) for the dissemination of the training and its results (examples of dissemination attached to this report as Annex 7). 5. EVALUATION The evaluation of participants’ satisfaction with the module(s) was carried out in three parts: Part 1: Assessment of satisfaction with the organization / educational institution for the module(s) Part 2: Satisfaction with the trainer’s skills / competences for the module(s) Part 3: Assessment of personal benefit for the module AGENDA “Determining the competitiveness of companies and developing strategies” (Module 1) 2020 October 21, 09:00-14:00 (6 academic hours) „Crowne Plaza Vilnius“, Conference Hall, M. K. Čiurlionio st. 84, LT-03100 Vilnius Lecturer – Nerius Jasinavicius “Legal environment and business transfer logistics” (Module 2) 2020 October 22, 09:30-14:30 (6 academic hours) „Crowne Plaza Vilnius“, Conference Hall, M. K. Čiurlionio st. 84, LT-03100 Vilnius Lecturers – Sergej Butov ir Kęstutis Adamonis “Financial optimization in business transfer” (Module 3) 2020 October 20, 09:00-14:00 (6 academic hours) „Crowne Plaza Vilnius“, Conference Hall, M. K. Čiurlionio st. 84, LT-03100 Vilnius Lecturer – Artūras Kapitanovas On the 20-22 October, 2020 Vytautas Magnus University, one of the INBETS BSR partners from Lithuania, successfully run the Business succession education training program for business owners and potential successors (entrepreneurs, students, graduates and others). During 3 days trainings participants deepened their knowledge on three important business transfer aspects: • “Financial optimization in business transfer processes”, lectured by Mr.A.Kapitanovas, experienced tax advisor; • “Determining the competitiveness of companies and developing strategies”, lectured by well-known business consultant Mr.N.Jasinavičius, and • “Legal environment and business transfer logistics”, presented by the law firm Sorainen partners Mr.S.Butov and Mr.K.Adamonis. Participants could choose particular one day training or could attend all trainings. To allow more participants to attend the trainings and decrease the risk of COVID-19 spread, the trainings where also broadcasted online. All registered participants received the certification of attendance form the Vytautas Magnus University’s Prof. Mr.V.Navickas. The success of the pilot trainings of such nature in Lithuania, proved that business transfer topic is of high importance for matured entrepreneurs and business founders, as well as interesting for potential successors. IMPRESSIONS […]
Business Successors Training 1.INTRODUCTION INBETS BSR aims to examine, further develop and design innovative and transferable models and tools, facilitating business transfers of small and medium-sized enterprises (SMEs), make them widely available and implement them in companies. One of the main tools to achieve these goals is Business Successors Training Educational Program, which aims to provide the knowledge and capacity building of those with business practices or business education necessary for the successful management of business transfer processes, in order not only to keep existing SMEs but also to increase their market value through innovative, successful business growth. 2. AIMS AND OBJECTIVES Vytautas Magnus University, one of INBETS BSR partners, developed this Business successors education training program for business successors (buyers, sellers, heirs), which consists of 3 separate modules lasting a total of 18 hours. All modules focus on the essential skills and competencies necessary for a successful business transfer process, highlight the basic issues of business transfer and their practical solution scenarios, and allow participants to choose training modules that meet their needs.The first step of this program adoption is to test it with a target group, so that at least 30 people would be trained for business succession, and receive their feedback on the satisfaction with: the organization / educational institution for the module(s), the trainer’s skills / competences for the module(s), personal benefit for the module(s). This implementation report presents the results of the first testing of Business Successors Training Education Program, which was carried out on 20-22 of October, 2020. 3. PARTICIPANTS The target groups of Business Successors Training Educational Program are: Entrepreneurs: company / business owners, shareholders, company employees Students (with basic entrepreneurial knowledge), Graduates (from different levels and fields), Private and public sector employees seeking in-service training or retraining. Since the target group is wide, the registration for the training was carried out using Google Forms, so that it would be widely available for everyone who is interested in participation of testing of a new training program.The testing of Business Successors Training Educational Program attracted 67 participants in total. Participants’ list is attached as Annex 1 to this report. 4. IMPLEMENTATION The testing of Business Successors Training Educational Program was carried out as follows: 2020 October 20 – testing of the Module 3 “Financial optimization in business transfer” (lecturer Arturas Kapitanovas, 6 academic hours, 52 participants – 18 present and 34 online via Facebook live stream); 2020 October 21 – testing of the Module 1 “Determining the competitiveness of companies and developing strategies” (lecturer Nerius Jasinavicius, 6 academic hours, 29 participants – 14 present and 15 online via Facebook live stream); 2020 November 22 – testing of the Module 2 “Legal environment and business transfer logistics” (lecturers Sergej Butov and Kestutis Adamonis, 6 academic hours, 25 participants – 11 present and 14 online via Facebook live stream). Each training day started with a welcome word and presentation of INBETS project from prof. Vytas Navickas, who is the project manager of INBETS at Vytautas Magnus University. The participants were introduced to the main goals of the project as well as some visual information, available on the official project website https://inbets.eu/, followed by a presentation of lecturers, who were responsible for the first testing of Business Successors Training Educational Program. Training agenda is attached to this report as Annex 2. At the end of each training day Vytautas Magnus University has served the certificates of attendance to all the participants (106 certificates to 67 participants in total) and collected the feedback regarding each testing in order to assess the need for revision of the training (example of the certificate attached to this report as Annex 3, example of filled in evaluation form attached to this report as Annex 4, photos of the trainings attached to this report as Annex 5, training material attached to this report as Annex 6). Since the testing of training was carried out during the global Covid-19 pandemic, every testing session was translated live on Vytautas Magnus University Facebook account, which can be found here: https://www.facebook.com/VDU.svietimo.akademija. The information about the Business Successors Training was presented on Vytautas Magnus University website and social media accounts (Facebook) for the dissemination of the training and its results (examples of dissemination attached to this report as Annex 7). 5. EVALUATION The evaluation of participants’ satisfaction with the module(s) was carried out in three parts: Part 1: Assessment of satisfaction with the organization / educational institution for the module(s)Part 2: Satisfaction with the trainer’s skills / competences for the module(s)Part 3: Assessment of personal benefit for the module AGENDA “Determining the competitiveness of companies and developing strategies” (Module 1) 2020 October 21, 09:00-14:00 (6 academic hours)„Crowne Plaza Vilnius“, Conference Hall, M. K. Čiurlionio st. 84, LT-03100 VilniusLecturer – Nerius Jasinavicius “Legal environment and business transfer logistics” (Module 2) 2020 October 22, 09:30-14:30 (6 academic hours)„Crowne Plaza Vilnius“, Conference Hall, M. K. Čiurlionio st. 84, LT-03100 VilniusLecturers – Sergej Butov ir Kęstutis Adamonis “Financial optimization in business transfer” (Module 3) 2020 October 20, 09:00-14:00 (6 academic hours)„Crowne Plaza Vilnius“, Conference Hall, M. K. Čiurlionio st. 84, LT-03100 VilniusLecturer – Artūras Kapitanovas On the 20-22 October, 2020 Vytautas Magnus University, one of the INBETS BSR partners from Lithuania, successfully run the Business succession education training program for business owners and potential successors (entrepreneurs, students, graduates and others). During 3 days trainings participants deepened their knowledge on three important business transfer aspects:• “Financial optimization in business transfer processes”, lectured by Mr.A.Kapitanovas, experienced tax advisor;• “Determining the competitiveness of companies and developing strategies”, lectured by well-known business consultantMr.N.Jasinavičius, and• “Legal environment and business transfer logistics”, presented by the law firm Sorainen partners Mr.S.Butov and Mr.K.Adamonis. Participants could choose particular one day training or could attend all trainings. To allow more participants to attend the trainings and decrease the risk of COVID-19 spread, the trainings where also broadcasted online. All registered participants received the certification of attendance form the Vytautas Magnus University’s Prof. Mr.V.Navickas. The success of the pilot trainings of such nature in Lithuania, proved that business transfer topic is of high importance for matured entrepreneurs and business founders, as well as interesting for potential successors. IMPRESSIONS […]
About Vytautas Magnus UniversityEstablished in 1922 (re-established in 1989) Vytautas Magnus University (VMU) is the public institution implementing liberal arts study policy based on the Harvard study model and relevant research activities aimed at contribution to the society, as well as global community. Aside from 46 BA and MA full-time degree programmes in English, together VMU offers 138 study degree programmes, as well as integrated studies of law and postgraduate for 9433 students. The University offers doctoral studies in 23 diverse fields of natural, technological, agricultural, social sciences and humanities for 320 PhD students. Studies at VMU are organized by 9 faculties (Informatics, Natural Sciences, Economics and Management, Law, Political Science and Diplomacy, Social Sciences, Humanities, Arts, Catholic Theology) and 3 Academies (Agriculture, Education, Music). Academic and research infrastructure as well refer to VMU Kaunas Botanical Garden, Institute of Foreign Languages and Innovative Studies Institute; 9 departments, 8 university centres; and other divisions; Students’ Representative Council. In VMU the research capacity is achieved by uniting scientific human resources under the thematic clusters and institutes seeking to assure the interdisciplinary approach, broad scope, high impact, accessibility of research outcomes. VMU has been involved in H2020, COST, Erasmus+, Nordplus, LIFE, Interreg activities as well as national European Structural Funds’ projects as a project partner and coordinator (over 200 EU ongoing projects in the fields of biotechnology, biophysics, bioeconomy, agriculture, creative industries, law, education, sociology, psychology, computational linguistics, bilingualism, etc.), therefore the scientists have accumulated solid experience in international scientific research and project management, holding memberships of national and international professional associations of diverse scientific areas and fields. The main strength of research at VMU is our ability to respond to an increasingly globalised and competitive landscape prompting the dynamic formation of new research priorities and facilitating ongoing improvements in research performance at both national and international level. We have been engaged as a partner and coordinator in various Horizon 2020, Jean Monnet, COST, Erasmus+ and NordPlus programmes, as well as research projects within the Global Grant and Smart Specialisation programmes conducted by the Research Council of Lithuania and the European Structural Fund. Nationally, our research has received the top evaluation scores among higher education institutions in Lithuania. We are a leading university in the fields of Humanities, Arts, Social and Biomedical Sciences. At present, 36 research journals are published at VMU. 10 research journals are included in Clarivate Analytics Web of Science and (or) Scopus databases. 14 journals are published together with other Lithuanian and foreign institutions. VMU Faculty of humanities has innovative, modern infrastructure for research and studies. Vytautas Magnus University has around 30 study, research and arts centres:   • Andrei Sakharov Research Centre for Democratic Development    • Arts Centre    • Centre for Asian Studies    • Centre for Enterprise Practices • Centre of Computational Linguistics    • Centre of Multilingualism    • Demographic Research Centre    • Energy Security Research Centre    • Institute of Education Sciences    • Institute of Foreign Languages    • Institute of Innovative Studies    • Lithuanian Emigration Institute    • VMU Arts Gallery 101    • VMU Botanical Garden    • VMU Theatre    • World Lithuanian University    • and many more. Laboratories and Computer Classes The university also has over 50 laboratories and computer classes, such as the audiovisual technology laboratory, media lab, sound studio, laboratories for biotechnology, environmental science, 3D modelling, neuroscience, intelligent systems, microsynthesis, HPLC and UPLC, capillary electrophoresis, microbiology, biochromatography, miniaturised bioreaction, etc. VMU is a member of diverse EU associations and international organisations of higher education and research such as the European University Association, the European Association for International Education, the Baltic Sea Region University Network, European Distance and E-Learning Network, etc. The University having over 500 Erasmus+ partners in 60 states has signed over 200 bilateral collaborative agreements covering 42 countries in Europe, Asia, South and North America, North Africa, China. More info: https://www.vdu.lt/en/ Vytautas Magnus University (VMU) and the INBETS project In the INBETS project, the main activities of the VMU are related to the preparation, testing and application of Entrepreneurship Education Programs, and the implementation of trainings based on them, which are focused on the development of competencies in business transfer and takeover processes. Three training programs have been developed. Entrepreneurship Education, (562 hours) Train the traineers for Entrepreneurship Education (18 hours) and Business Successors Training (18 hours) Entrepreneurship Training Educational Program, which purpose is to train people to become entrepreneurs to increase the number of well-qualified young entrepreneurs in all BSR countries, so that sufficient numbers of qualified entrepreneurs are available for the growing number of SMEs looking to takeover, also ensuring an innovative, successful continuation of the company by the next generation. Vytautas Magnus University, one of INBETS BSR partners, has prepared this comprehensive Entrepreneurship Training Education Program, which consists of 6 individual modules covering a total of 562 hours. All modules focus on entrepreneurship skills and competences, and to be lectured through widely used methods, fostering specialization, general and specific competences in management and general social competency. The main learning objective of Entrepreneurship Training Educational Program is to give the target group the knowledge and skills they need to be able to become entrepreneurs, successfully manage business or transfer business to potential successors. That should be provided through following modules of the prepared curricula:    1) Determining Corporate Competitiveness;    2) Developing Corporate Government Strategies;    3) Innovation Management;    4) Basic Computer Skills, Bookkeeping;    5) Preparing, Completing and Evaluating Start-up and Takeover Activities;    6) Human Resources Management & Vocational Education Knowledge. Depending on the individual needs of the trainees, only individual modules or the complete training course can be completed. INBETS BSR aims to examine, further develop and design innovative and transferable models and tools for facilitating small and medium-sized enterprises (SMEs) business transfers, make them widely available and implement them in companies. One of the main tools to achieve these goals is to strengthen institutional capacities of existing business support organisations (BSOs) for successful business transfers by qualifying permanent staff of BSOs as transfer coaches. This modularised concept, curricula and documentation for Train-the-Trainer activities was developed for the purpose of implementation of Train-the-Trainer seminars with staff from BSOs and experts from transfer partners in order to qualify them as transfer coaches. The aim of the training is to familiarize the participants with all the tasks of consulting and promotion of business transfers. The target groups of Train-the-Trainer Seminar were:    · Teachers and lecturers from universities / colleges, chambers, training institutions, etc., who are involved in the training of entrepreneurs;    · Advisers to Chambers and other business development agencies involved in advising, coaching and promoting business transfers and start-ups. The main learning objective of Train-the-Trainer Programm and Seminar is to give the target group the skills they need to become permanent qualified business transfer coaches, which means that:    · The participants should be able to get an overview of the main topics of entrepreneurship education and to be able to assess which competences are necessary for the communication of this content;    · The participants must have pedagogical skills and experience that will be refreshed and supplemented by the training on pedagogical issues of entrepreneurship education;    · The participants should get to know the whole process of training and coaching of potential founders and transferees;    · The participants should be enabled to independently carry out the training and coaching on the basis of curricula and teaching materials. A. Training as an Entrepreneur – introduction and explanation of main training content, divided into 6 Modules:   A1. Determining Corporate Competitiveness;    A2. Developing Corporate Government Strategies;    A3. Innovation Management;    A4. Basic Computer Skills, Bookkeeping using Commercial Software;    A5. Preparing, Completing and Evaluating Start-up and Takeover Activities;    A6. Human Resources Management & Vocational Education Knowledge. B. Pedagogy as well as Coaching and Consulting Process:    B1. Pedagogical questions procedure and examination of training to become an entrepreneur;    B2. Design and instruments of the consulting process for company transfers. The second Programm prepared by VMU is Business Successors Training Educational Program , which aims to provide the knowledge and capacity building of those with business practices or business education necessary for the successful management of business transfer processes, in order not only to keep existing SMEs but also to increase their market value through innovative, successful business growth. Vytautas Magnus University, one of INBETS BSR partners, developed this Business successors education training program for business successors (buyers, sellers, heirs), which consists of 3 separate modules (Determining the competitiveness of companies and developing strategies, Legal environment and business transfer logistics and Financial optimization in business transfer processes) lasting a total of 18 hours. All modules focus on the essential skills and competencies necessary for a successful business transfer process, highlight the basic issues of business transfer and their practical solution scenarios, and allow participants to choose training modules that meet their needs. […]
Transfer description The Veda holding company was founded in 1994. In the middle of the 2000s Veda was one of the leaders in vodka market in Russia. It occupied the 2nd place in whole Russia market and the 1st in the North-West region. The company had its own liquor enterprise in the Leningrad region (in Kingisepp) and a plant for the low-alcohol cocktails manufacture in Saransk. In 2005, Kirill Rogozin – the Veda founder died tragically: he was riding a snowmobile across the Gulf of Finland, and ice cracked under it. The younger partner – Aleksandr Matt had to manage Veda on his own in spite of the fact that he did not participate in company’s operating activity before. Since 2008, all companies that were part of the holding have gradually gone bankrupt. At the same time, executive director of the alcohol department, who was a good expert in distribution area, left the company. According to Rosstat data, in 2007 Veda’s plant in Kingisepp produced only 32.8% volume from the same period last year, the plant in Saransk only 34.9%.  Sources: Business Petersburg – 2018https://www.dp.ru/a/2018/05/28/Desjat_bizneskrahov Kommersant – 2008https://www.kommersant.ru/doc/868879 Facts Previous Current Owner Kirill Rogozin Aleksandr Matt and Anastasiia Rogozina Legal form of the company Ltd Ltd Number of employees ? ? Brand Model of transfer Involved institution Country Russian size Waltz BostonMatrix 6 Transfer by mixed methods (model1 Family transfer + model 3 Transfer to company executives) Russia […]
Transfer description The business started as a project where one of the goals was to make an exit. In the year 2012, the company needed capital to finance the company’s next stage of development. Regarding the options, they either wanted a venture capital firm or finding a buyer. The successor was found in the company. It is a company specializing in buying other companies. Because of that the buying company has a department that is continuously scanning the market for potential companies to buy. Representatives of the two companies also met in different situations and thus the information about the prospective sale reached the buyer. They used an earnout model where the successor paid the first 72% in 2013 and the remaining 28% in 2016. This was to animate the shareholders to continue to do a good job and help the company continue to grow even after the transfer. The previous owners and all remained in the company. In 2016 when the business transfer was closed only two of the previous owners stopped working in the company. All other persons remained. The people in charge started thinking about the transfer and in the next step preparing the company for sale in early 2011. The discussion about identifying potential prospects (i.e. a buyer or a venture capital firm) started in Q3 2012. In May 2013, the last paperwork with the successor was completed and in 2016 100% was paid for the company and the deal was closed. It was a challenge to identify a potential buyer. Initially, they were looking for a venture capital firm. Additionally, it was hard for a relatively small company to find suitable contacts and create enough interest from potential investors. No, the planning of the new services to be provided was already under way before the transfer. Yet, the new ownership created a more comfortable and safe feeling to really make the efforts. The launching of the new services also went faster. When you have a growth-oriented mind set you are focusing on buyers/professional investors that are bigger than your company. This situation makes the former owners an underdog when it comes to aspects such as financing and knowledge. The former owner, therefore, recommends persons who plan to sell their companies to include a specialist in the negotiations. Otherwise, it will be an uneven starting point. The due diligence process was about 2-2,5 months and the seller explains that this process puts pressure on their organization since all information about the selling company it brought up. Everything needs to be transparent which could create a great pressure on the company. Therefore, the seller recommends other companies that are about to sell to be well prepared for marketing their company, i.e. to make it look as attractive as possible for the potential buyer. This includes the provision of solid financial figures as well as strong intangible values (such as a strong brand, well trained personnel) to show potential new owners the value they will get by buying the company. The seller also says that you should be prepared that the entire business transfer process takes time, especially if you have a growth plan that requires significant financial capital. This means that you will need to have available sufficient financial capital to make sure both 1) that the company can continue to grow and 2) that you can look for potential buyers who are willing to invest in the company’s continued growth. You don’t want end up in a situation where you are forced to sell the company at a low(er) price just because you run out of money before you find the right buyer. Facts PreviousCurrentOwnerAbout 50 different shareholders, i.e. mix of founder employees and business angelsAnonymousLegal form of the company LtdLtdNumber of employees 4598 BrandModel of transferInvolved institutionCountryAnonymous5 Transfer to another companyLawyer to write up contractSweden […]
Vilnius Chamber of Commerce, Industry and Crafts (Vilnius CCIC) is a wide network of Lithuanian business representatives and community that unites over 550 Lithuanian companies from different leading business sectors as well as universities, colleges and other educational institutions. The mission of the Chamber is to represent business interests at state and regional authorities, as well as to provide services necessary for business enterprises. What is more, Vilnius CCIC is a social partner for state and regional governments. Vilnius CCIC is located in the most developed region in Lithuania, in the capital city Vilnius. Together with Alytus and Ukmerge branches, Vilnius CCIC is an organization that unites the business community in Lithuania, operating in accordance with the Law on Chamber of Commerce, Industry and Crafts of the Republic of Lithuania. Vilnius CCIC has taken over and holds on the traditions of the institution set up in 1925. Combining modern management, technologies and human competences the Chamber strives to become one of the most advanced, strongest and most successful business communities in Lithuania, whose main goals are:      • strengthen the competitiveness of enterprises      • improve the business environment      • bring together and strengthen the business community      • create harmonious society Vilnius CCIC offers the following services business enterprises:      •  Issues certificates of origin and certificates of force majeure      •  Approves the authenticity of documents used for foreign trade      •  Consults the members of the Chamber and Lithuanian companies on the issue of customs duties, certificates of origin, ATA carnets      •  Helps member companies to find business partners abroad (business enquiries, offers, incoming missions)      •  Announces business offers from foreign companies      •  Organizes trade missions      •  Organizes the attendance and participation at international exhibitions and fairs abroad      •  Organizes conferences and seminars      •  Participates at regional and international projects      •  Provides business consultations      •  Etc. Vilnius Chamber of Commerce, Industry and Crafts has a long practice in consulting businesses, both companies and persons who work on their own. Consulting areas varies from business creation to business transfer or shutdown. VCCIC also has deepened valuable experience in business development services, e.g. export promotion, raising competences of personnel, clustering, etc. though project implementation. VCCIC is also working in the field of business environment improvement and has a wide range of partner organisations, close contacts with regional and state institutions. VCCIC is involved in different work groups related to improvement of business conditions and environment in the region in Ministry of the Economy and Innovation of the Republic of Lithuania. With all experience and competencies, VCCIC joined the INBETS project team to create entrepreneurial outputs for business promotion, successful business transfers and regional economic growth. […]
Transfer description While participating in an accelerating program for making companies grow, Martin and Lena realized that they were too old to make all the investments and efforts that would be needed to keep growing. Instead, they decided to sell their company since the company had already increased in turnover during the accelerating program. At first, they wanted someone from inside to take over of the company (i.e. internal succession), but no one was interested. Their second thought was to sell the company to another company they had in mind, but the process dragged on and a deal was never closed. Then they met a representative of another larger company when delivering goods and by chance they started talking about their company and their plan to transfer it. This other company was immediately interested, and the succession/transfer process started. The new owner could draw on many years of experience in running a company. To increase the likelihood that the company’s values and previous owners’ knowledge etc. could be transferred to the new owner, the previous owner is remaining in the company for at least 6 months. The process is ongoing as the interview is held. The previous employees are also remaining in the company. The overall process from deciding to sell the company until the previous owner finally can leave the company will take approximately two and a half years.The paper work to make the transfer happen took two months. The former owner was very well prepared and did not find it challenging. From the sellers’ side, perhaps, most challenging is the mental preparedness to sell your company to someone else. No innovation, but a new way of working and making the daily work more efficient. The former owner recommended the successor to start using more digital tools to make the work easier for the employees and the new owner. This was software that helps manage and log activities in the company and it was implemented at ones. Lessons learned: Be honest, transparent and well prepared as a seller when you meet with the successor and his/her legal representative. This will shorten the process. Prepare yourself mentally for the sale a long time before you take the fundamental step, at least two years. It will mean a big change and may turn out being emotionally tough. It is a big change to sell the company you have started and worked in for a long time. You must be 100% sure that you want to sell. You should involve individuals or organizations specializing in business transfers to master relevant aspects such as legal and economic issues Facts PreviousCurrentOwnerMartin Ivarsson & Lena IvarssonHylte transport ABLegal form of the company LtdLtdNumber of employees 1032 (no new people were hired but because two companies were combined into one, the number of employees increased). BrandModel of transferInvolved institutionCountryMartins Gräv5 Transfer to another companyThey worked with a consultant from ”LRF consult – business support organization” who the sellers met through the business accelerator program. They also involved the company’s accountant in the process. The previous owner claims that companies often contact a business broker who takes a percent of the sale profit. They did not, but instead they worked together with LRF and the accountant on an hourly basis. This reduced the costs of the business transfer process.Sweden […]
Transfer description The founder of the company and the owner of the know-how was no longer interested in the development and management of the company. In search of a buyer was involved in a networking, search in the business community. The search lasted about 6 months. The business transfer process took about a month. The main difficulties in the process were caused by the search for a buyer and registration of the transfer of intellectual property and technology to the new owner. At the moment, the technology of transfer and preservation of know-how in the company is not sufficiently developed at the legislative level. Facts PreviousCurrentOwner1. Omelyanovich Dmitry Alexandrovich 2. Immanuel Kant Baltic Federal University1. LLC Service center Taurus 2. Immanuel Kant Baltic Federal UniversityLegal form of the company LtdLtdNumber of employees 13 BrandModel of transferInvolved institutionCountry5 – Transfer to another companyIn search of a buyer and for advice on the design of the transfer of know-how, the owner addressed to non-profit organizations to support entrepreneurship: «Union «Kaliningrad chamber of Commerce and industry», «Association of SMEs support centers of the Kaliningrad region». Assistance was provided free of charge.Russia […]
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