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Below is a description of an information guide, created by the St. Petersburg Foundation for SME Development, specifically for SMEs in relation to business transfers. The guide can also be accessed below. 

INBETS – innovative business transfer models. Guide for Small and Medium Enterprises
INBETS –
инновационные модели бизнес трансфера. Руководство для малых и средних предприятий

Today, the problem of transferring business is a burning issue in Russia. Many Russian companies were created in the 1990s and still are managed by their founders. The owners of these companies are already reaching retirement age. Numerous researches and studies show that typical business owner in Russia is between 45 and 55 years old. It should be noted that only a few companies or families have developed formal and documented business transfer plan (Forbes: Business for successor: how to transfer assets to children or partners, 2017).

In Russia the main hindrance for successful business transfer is a lack of owners, entrepreneurs and other interested parties awareness about the complexity of business transfer process and absence of united supporting ecosystem for companies.

In the framework of INBETS BSR project realization we prepared information Guide especially for SMEs going through the business transfer stage. The Aim of this guide is an adaptation and collection in one document all the possible practices and innovative solutions that will help SMEs operate on the market during a longer time and become a source of families’ well-being in the long term.

The guide contains statistical data about business transfers in Baltic Sea region and Russia, information about innovative business transfer models, models of SMEs financing, methods of company valuation, business transfer success stories and contact information for business support organizations, coaches, legal and financial organizations, as well as organizations working with youth, and allowing SMEs to support successful transfer of companies and knowledge in St. Petersburg.

Guide is in Russian | Руководство на русском языке    –   (please click on the picture below to download the guide)

Cases from Russia
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 […]
Success Story Foundation held an expert panel “Innovative models of business transfer: challenges and opportunities” in the framework of “Strategic Planning Leaders Forum” On October 29, 2019 representatives of the Foundation organized the Expert panel «Innovative Business Transfer Models: challenges and opportunities» during the XVIII Annual Strategic planning leaders forum of the regions and cities of Russia. Participation in the Expert panel allowed analyzing opportunities and challenges for cooperation between regions, countries and cities and discussing different ways and strategies for developing new cooperation instruments in order to strengthen institutional capacity in the business transfer support field. More than 50 participants from different countries took part in the event. The following experts took part in the discussion:•  Max Hogeforster – President – Hanseatic Parliament – Baltic Sea Academy•  Anita Richert-Kaźmierska – Assistant Professor – Gdansk University of Technology•  Vytas Navickas – Professor – Vytautas Magnus University•  Lebedeva Marina – Head – Centre for Innovations in Social Sphere•  Ruzhinsky Alexander – Founder – Startup Junior School of Entrepreneurship and soft skills;•  Shchelkanov Aleksandr – Development Director – St. Petersburg Regional office of the All-Russian Public Organization “Business Russia”•  Starkovsky Daniil – Director – State Budget Institution “Saint Petersburg House of Youth” Mr. Maxim Balanev – Executive director and head of INBETS project at St. Petersburg Foundation for SME Development was moderator of the event. […]
Realization of National projects in St. Petersburg was discussed in St. Petersburg Chamber of Commerce and Industry with INBETS BSR project supportSuccess StoryOn October 15, the St. Petersburg Chamber of Commerce and Industry hosted a meeting dedicated to the implementation of national projects in St. Petersburg. The event was held with the support of the St. Petersburg Committee for Industrial Policy, Innovations and Trade and St. Petersburg Foundation for SME development.During the meeting Mr. Maxim Balanev – Executive director and head of the INBETS project at St. Petersburg Foundation for SME Development presented key objectives and main results of the INBETS project. The participation in the Meeting allowed discussing possible ways of cooperation with representatives of regional authorities, business and entrepreneurial associations, business support organizations and business representatives.Representatives of the following organizations participated in the Panel Discussion as key experts:    • St. Petersburg Committee for Industrial Policy, Innovations and Trade;    • St. Petersburg Chamber of Commerce and Industry;    • Unified Entrepreneurship Center;    • All-Russian Public Organization of Small and Medium-Sized Enterprises OPORA ROSSIA St. Petersburg branch;    • The Union of organizations of business angels (SOBA);    • St. Petersburg Regional office of the All-Russian Public Organization “Business Russia”;    • Small and Middle-scale Business Crediting Assistance Fund, MFI;    • Association “St. Petersburg Business women” (Delovaya Peterburghenka);    • Union of Small Enterprises of St. Petersburg;    • The Union of Industrialists and Entrepreneurs of St. Petersburg. […]
Success Story Lydia Pogorzhelskaya founded her Atelier «Madlen» in the difficult 90’s. Lydia went through all the difficulties of becoming, gathered a team of professionals and created a successful business with an excellent reputation. In 2017 yr. Lydia Pogorzhelskaya began to come to the idea that she would like to leave busines. Health conditions and age did not allow to work with the same intensity as before. First thought owner was about the family members, but they didn’t show any desire. There was a question of finding a successor. The search took some time and the interested person was found in own team. Ekaterina Ponomareva, the company’s leading fashion designer, expressed interest in acquiring the Atelier. Lydia Pogorzhelskaya asked the Association of support centers to provide assistance. The Association provided consulting support on the transfer procedure, the main issue was finding financing for the purchase of a business by an employee. The transfer was successful, and the business continues to operate. The new owner is happy with the result and full of ideas for further business development. Facts   Previous Current Owner Lydia Pogorzhelskaya Ekaterina Ponomareva Legal form of thecompany Owned by one person Owned by one person Number of employees 7 8 Brand Model of transfer Involved institution Country Agriculture 3 – Transfer to company executives Finance advisor Russia   Below is an article (in Russian) about this business transfer of Madlen Atelier. (Please note that it is also possible to download this article as a pdf by clicking on the image below). […]
Non-commercial partnership “Association of SMEs support centers of the Kaliningrad region” it is an organization that provides information, methodological, organizational and technical support to business support centers that are its members. The Association also provides consulting services to individual small and medium-sized businesses in the Kaliningrad region on various issues of doing business, implementing investment projects, and interacting with scientific and educational organizations in order to implement innovative projects in the region. As part of the implementation of the tasks and projects, work is underway to prepare information and methodological manuals, educational programs and educational materials dedicated to the promotion of entrepreneurship and improving the entrepreneurial literacy of the population. The Association is an integrator, information and methodological center and competence center for the functioning of the infrastructure for supporting entrepreneurship and improving the level of entrepreneurial literacy of the population. Purpose of activity:Coordination and improvement of the efficiency of municipal centers for support of small and medium-sized businesses in the Kaliningrad region, assistance to the successful development and functioning of small and medium-sized businesses in the region. Task force:   – Small and medium-sized businesses.   – Representatives of business communities.   – Population of municipalities in the Kaliningrad region. Main activities:   • Consulting services, marketing research, preparation of business plans.   • Organization and holding of regional and international events, conferences, forums, round tables and seminars for the organization’s objects of                   activity.   • Informing small and medium-sized businesses about existing measures and support programs at various levels.   • Establishing partnerships with specialists from the Kaliningrad region, other regions of the Russian Federation, and foreign experts to study the                  activities of international non-governmental organizations in order to use their practical experience.   • Implementation of projects and programs aimed at the development of entrepreneurship and the business community. «INBETS BSR is a very timely project for our region and our country. The global passion for start-UPS and serial entrepreneurship is taking the attention away from the old working business, which now faces the urgent question of transferring it to the next generation. After all, this business ensures the sustainable development of small territories, allows you to save jobs and improve the quality of life of local communities. Thanks to the participation of the project, we can get acquainted with the experience of partners from other countries where these issues became relevant much earlier and get acquainted with their experience. The main task of our organization in the project is to broadcast this experience in our region to inform and advise entrepreneurs of the Kaliningrad region about existing solutions. Legal, financial, and cultural aspects of business transfer and comprehensive support for entrepreneurs are also important. And we are glad that we can provide this support by participating in the project.» Alexander Ророv,President.Website: http://en.smb39.ru Contact InformationNon-commercial partnership “Association of SMEs support centers of the Kaliningrad region”Address:    Kaliningrad, Gorkogo street,69Phone:       +7 906-210-24-24E-mail:       info@smb39.ru Foundation on social mediaFacebook:   https://www.facebook.com/smb39ru […]
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 […]
Since 1995, acting behalf our international and national clients and partners, we had successfully implemented more than 500 projects. Mission of the Foundation is an initiation and implementation of significant initiatives and projects contributing to the economic growth and prosperity of St. Petersburg as well as the North-West Federal District of the Russian Federation. INBETS projectParticipation in the INBETS project provides for St. Petersburg Foundation for SME Development opportunities for mutually beneficial communication and international experience exchange due to the fact that goals of the project correspond to the mission of the Foundation, as well as to the strategic, social and economic development of St. Petersburg. During the implementation of the INBETS project Foundation conducted analysis of the issues in business transfer sphere in Russia and St. Petersburg, what organizations/ institutions that can help SMEs with mentoring or training (business and professional associations) and expanding business contacts network, which business transfer models are more popular in country and what legislative, administrative and psychological barriers face entrepreneurs during business transfers, etc. By now Foundation developed the guide for Russian SMEs which includes statistics data, information about business transfer models, financing models, ways of SMEs evaluation, business transfer success stories and contact information of business support organizations in St. Petersburg and abroad which assist companies in business transfers sphere. Foundation has also presented main results of the INBETS project during the key events in St. Petersburg. Contact informationSt. Petersburg Foundation for Small and Medium-sized Enterprise Development (St. Petersburg Foundation for SME Development) Address: 14, Izmaylovsky pr., 190005 St. Petersburg, Russia Tel.: +7 812 575 04 80, 325 83 51, 712 67 80 Fax.: +7 812 712 66 07 E-mail.: info@fbd.spb.ru Website: http://www.fbd.spb.ru Foundation on social mediaFacebook: https://www.facebook.com/spbfrbInstagram: https://www.instagram.com/spbfrb/?hl=ruVk: https://vk.com/spbfrb […]
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 BAGFACTORY is a non-woven PET bag manufacturer, a market leader in Lithuania and one of the market leaders in the EU. However, the recentgrowth of this company was driven by the transfer of 50 percent of its’ share to the legal entity, so is a great example of good business transfer case. Originally the company was owned by two individual persons and was oriented to exclusive small orders therefore was not very profitable, but satisfactory at the time. However, over the years the manufacturing equipment of the company has outdated and since the main activity of the company wasn’t very profitable, the owners could not afford the necessary equipment upgrade, which became one of the main reasons of undertaking the transfer’s decision. The owners of business started looking for investment opportunities and got acquainted with a legal entity, which became interested in PET bag manufacturing business on a larger and more innovative scale so has bought 50 percent of its’ share and invested a certain amount to the manufacturing equipment as well as started a regular work optimization process to reduce costs and production time. As a result, the company has the most modern, innovative, state of art equipment on the market, and has been renamed as BAGFACTORY. The process of the initial business transfer to new shareholders, as well as new ideas and opportunities, has happened because of the shared business values of both sides, which are social orientation, positive thinking and a close-knit team. However, the new owners brought some new ones as well, such as initiative, innovation and ambition, which are vital for successful and profitable business, so were the main factors of the recent success of the company. The process of business transfer took around one year, including negotiations and re-registration of the company. The main challenges/difficulties of this business transfer case were met meanwhile the transfer, because it was the time of negotiations, where both parties had to agree on (1) their future rights, responsibilities and accountabilities; (2) formation of a new company strategy; (3) the use of investment as well as return on investment (payback procedures); (4) maintaining the most important strategic human resources in the company in order not to lose the know-how. Once both parties agreed onthese strategic decisions, the business transfer was completed smoothly. The business transfer facilitated implementation of innovations – BAGFACTORY is initiating new research and experimental development projects in order to reduce the use of plastic disposable bags, contribute significantly to the reduction of environmental pollution and achieve its mission – innovative ideas for the development of ECO-friendly shopping bags. Facts PreviousCurrentOwner100% individual persons50% individual persons50% legal entity Legal form of the company Joint Stock CompanyJoint Stock CompanyNumber of employees 69 BrandModel of transferInvolved institutionCountryhttp://www.bagfactory.eu/5 Transfer to another companyThe main institution, involved in the business transfer process, was a law firm, because business transfer process requires a lot of negotiations and accompanying documents. The services provided were sufficient. The cost of the law firm services is a subject of contract and depends on mutual consensus as well as the scope of work.Lithuania […]
Transfer description The LenSpecSmu company was founded in 1987 by Viacheslav Zarenkov. LenSpecSmu operates in the field of development and construction. The company focuses on residential property for the middle class in St. Petersburg, where it is represented by the brand “Etalon LenSpetsSmu”, and also on construction in Moscow and Moscow region. In 2017 net profit of the company amounted to 7.9 billion , annual turnover was 70.6 billion . During 30 years working in the real estate market, the “Etalon” Group has built more than 200 properties with total area of more than 6 million square meters. The founder Viacheslav Zarenkov is the author of about 200 patents for inventions and realized over 30 construction investment projects. Dmitrii Zarenkov started to work in his father’s company in 1998 after getting experience at a leading position in another company. He became deputy director in LenSpecSmu, then he was appointed CEO and finally Dmitrii became the chairman of the Board of directors. For his successful work and achievements Dmitry received numerous awards and prizes. He became “Honorary Builder of the Russian Federation”, “The best Manager of St. Petersburg” and “The best Manager of the Year” on “Golden Manager” competition. However, at the moment the company’s transfer under its top manager’s control is being discussed in construction industry. In the end of 2017 there was strong decline (by 1.5 times) in stock price of the company. In summer 2018 Viacheslav Zarenkov and members of his family started selling their shares in LenSpecSmu. Sources: official site of the companyhttps://lenspecsmu.ru/about/news/etalon_group_usilivaet_komandu_menedzhmenta Business Petersburg – 2016https://www.dp.ru/a/2016/09/22/GK_JEtalon_pokidaet_star Parlament – 2018http://www.parlamentua.com/item/37619-vyacheslav-zarenkov-vyvodit-svoi-doli-izetalona-%20chtob-potom-obankrotit-gruppu Facts PreviousCurrentOwnerViacheslav ZarenkovDmitrii ZarenkovLegal form of the company LtdLtdNumber of employees More than 5.000More than 5.000 BrandModel of transferInvolved institutionCountryEtalon LenSpecSmu3 Transfer to company executivesRussia […]