From the preface : The European Commission supports Member States by providing them with recommendations, guidelines, information and good practices. For years, the European Commission has stimulated Member States to develop matching platforms to efficiently support sellers and buyers of SMEs in ownership change. A matching platform is a valuable link in the sale/acquisition chain of SMEs. Over the ten past years, not only the European Commission has been pointing out the essential role played by platforms. In many Member States matching platforms started or matured, either in the public sector, by private organizations or both (semi-public). Matching platforms are mentioned in all the EU business transfer reference documents and more particularly in the Small Business Act and its Review in 2011, the 2006 Communication, the 2013 Expert Group on SME Transfers and the recent Entrepreneurship 2020 Action Plan. Special attention is devoted to the important challenge of efficient matching platforms in Europe. As observed in the latest (2013) EU Expert Group on Business Transfers: There is no development in the type of matching platforms recommended by the 2006 Expert Group. The “landscape” of matching platforms in Europe has changed over the past 10 years, with, among others, the co-existence of private on-line platforms alongside the public platforms. There is a need for an update in quality standards and for the consultation of matching platforms themselves in order to understand their working and identify good practices.
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This literature study reviews 300 academic publications on digital matching platforms, SME business transfers and the underlying drivers for success in matching and business transfers. How to build digital trust, how to select partners digitally and how to predict survival of digital matching platforms themselves? The outcomes are input to improve digitale matching of sellers and buyers of SME business transfers in Europe.
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Every year I talk to many entrepreneurs about business transfers and acquisitions. Only rarely do they tell me that it was a cinch. Buying or selling a business is complex. For a start, a business should be shipshape from an organizational and administrative perspective, while several legal and fiscal matters also affect the transaction. Moreover, many parties are involved in a business transfer: the buyer and the seller, of course, but also the employees, the spouse and/or family of the entrepreneur, the customers and suppliers. Emotions and trust also play a central role in selling a firm. Many owner/managers find it hard to abandon their business. The fact that a transaction of fixed assets may also be involved is another complicating factor. Is it a good thing to include fixed assets in the sale, or in fact the reverse? Considering that most people find it quite hard to sell their own house, engaging an estate agent to do it for them, it is understandable that buying and selling a business is a transaction fraught with difficulties.
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The EU and national governments rely on expert panels and opinions for their policies (EU, 2003; EU, 2006a; EU, 2006b) on SME ownership transfers. Also entrepreneurs depend on expert opinions and advice. We know from expert studies that expert judgment may lead to confusion and conflicting results. Can we rely on expert opinions in ownership transfers, especially if there are different specialists involved? 71 Dutch SME specialists on ownership transfers (accountants, bankers, business brokers, business consultants) and 10 entrepreneurs were interviewed with open questions. The answers were counted and the averages of different groups of specialists were tested by one-way ANOVA and Tukey’s HSD. The results indicate that expert opinions are largely divergent on issues, but become convergent on solutions. Most given solutions by experts are more awareness/information and involving professional advice. Not the accountant, the international most widely used advisor by entrepreneurs in ownership transfers, but the business broker seems best fit to advice. Business brokers are active in more phases of the ownership transfer, are better connected to other specialists and have the most structured working method. We detect serious market failure to provide advice for entrepreneurs on business transfers. More than one specialist is needed, the best suited advisor - the business brokers - are unattainable for most micro firms. To overcome market failure transfer vouchers might connect entrepreneurs better to business brokers. Our results are confined by the sample, being small, select and national
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This study (re)tests the relationship between planning and transfer success. Previous studies show that planning increases satisfaction, but find no or only weak relations to transfer effectiveness. 76 Dutch SME business owners, who succeeded in the transfer, were surveyed. To improve on previous studies reliable scales were constructed and results were tested for common method bias, social desirable answering and nonresponse. Multi regression analyses indicate that planning and preparation does relate to satisfaction but has no relation with performance. To predict effectiveness of SME transfers both the market and entrepreneurial abilities of the buyer seem more appealing.
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Combining overview studies and adding own qualitative research on top of that, a questionnaire is developed to operationalize quality of digital matching platforms for sellers, buyers and advisors in SME business transfers and acquisitions
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Stevenson & Landström (2002) state that Opportunity, Ability and Motives predict entrepreneurship in general. Connecting thirty previous studies we test if the market awareness, endurance, planning and preparation as entrepreneurial ability factors, staff as opportunity factor and the reason for transfer as motive predicts three short term performance (needed transfer time, satisfaction and emotional attachment after transfer). We tested our hypotheses on a representative sample of 130 Dutch business owners who succeeded in a business transferring in 2005 and 2006. Market awareness predicts a faster transfer. Surprisingly more planning and preparation is the best predictor for a long transfer time as does the absence of the selling business owner. More or less forced transfers (illness, declining performance) predict lower satisfaction were as endurance predicts a higher satisfaction. This is valuable information for buyers, business brokers, accountants and bankers. The operationalisation of transfer performance seems vital. All main predictors, even the control variables, show only effect on either the needed transfer time (effectiveness measure) or satisfaction (experience measure). This confirms earlier findings (Van Teeffelen, 2007b). Our common challenge in future is to compare internationally the succeeded, non-succeeded transfer and exits.
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Letting go of the firm or “my baby” as some entrepreneurs describe their creation, leads to a certain amount of stress (Rahim 1996, Kets de Vries 1999). Dealing with stress in singular events as the transfer of a business, is hardly been subject of research (Uy et al. 2012). Improving coping strategies in business transfers for the incumbent could be of importance as statistics indicate the continued aging of owners in the European Union. Expanding the possibilities of incumbents to sell their business and move on to their next phase in their life would help to offset such negative effects to each national economy. The number of failed business transfers of viable SMEs now threatens innovative driven European economies (European Commission 2003, Van Teeffelen 2010, Stone et al. 2004). A recent study calculated that the Dutch economy suffers 20,000 unnecessary SME liquidations and approximately 10,000 failed successions per annum, with a projected economic damage of 80,000 jobs, a loss of turnover of almost € 4 billion and a destruction of assets of about € 2 billion yearly (Van Teeffelen 2012). Therefore we believe that coping strategies and psychological barriers in business transfers deserve more academic attention. Our aim is to check and add items to the list of psychological barriers and finally to relate barriers to coping styles. Therefore we engaged in a qualitative study that seeks to explain a particular issue and allows the researcher to study issues in depth and produces detailed data on a small number of individuals (Hyde 2000).
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The objective of this study is to shed light on the added value of the services of five disciplines in M&A advisory in the SME domain: accountants, bankers, business brokers, fiscalists and lawyers. Theory is inconclusive in the added value of advisory services and research on the subject is hardly available. RBV predicts direct benefits in using advisory services in M&A, leading to less obstacles in and directly after M&A or lagged effects on more renewal of the firm. The theory of structural holes, agency theory and management entrenchment theory on the other hand predict neutral or negative effect of advisory services in M&A. The dataset includes 899 mergers and acquisitions (1) completed before 2003; (2) with an acquirer having bought 100% of target shares or assets; (3) of German, Belgian or Dutch origin; (4) of non-listed firms; (5) where acquirer and target firm are not member of the same family. Using (M)ANOVA’s and controlling for the effects of more than one advisor involved, the outcomes show consistently that the M&A advisory services do not reduce obstacles like financing, misinformation and culture and staff problems during or immediately after M&A. Looking at lagged effects of advisory services in the period of two years after M&A strategic more renewal by innovation occurs if bankers, fiscalists and lawyers are involved. Involvement of accountants and business brokers on the other hand decrease renewal.
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In this study we test if successors timing of the acquisition and his actions account for better firm performance. We surveyed 500 Dutch SME successors two to six years after their acquisition. With ANOVA we tested successors timing (declining, average and increasing economical growth) and actions taken (organizational change, innovation, extending markets, no change). All tested actions improve post transfer performance compared to no action taken. Firms acquired in declining economical conditions perform best. No interaction effects are found between timing and actions suggesting that actions are beneficial to performance in any macro economical condition.
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