The wider context
Business Transfers constitute a critical milestone in business development, the importance of which is often underestimated. Numerous studies suggest that, in effect, business transfers constitute a “high risk – high return” procedure: mainly due to the amount and the diversity of parameters involved, often, business transfer attempts cannot be concluded successfully. Furthermore, even in the case of concluded transfers, osmosis of future (to-be) visions & targets with existing (as-is) affairs is not always successful. Hence, business transfers may lead to dismantlement of business units, contraction of activities, disillusionment of human resources and loss of value both for the immediate stakeholders (buyers, remaining personnel, customers, suppliers) and the society as a whole.
On the other hand, if successful, business transfers may lead to economies of scale, horizontal and vertical integrations, accumulation of valuable know-how, enhanced synergies, increased competitiveness, employment, turnover & profits.
Transfer of business needs to be placed within the larger context of EU objectives to promote smart, sustainable and inclusive growth. This particular call aims to support the implementation of the Small Business Act (SBA) where business transfers are specifically mentioned under the first principle: “To create an environment within which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded. In the SBA Member States are specifically invited to: ensure that taxation does not unduly hamper transfer of business, put in place schemes for matching transferable businesses with potential new owners and to provide mentoring and support for business transfers.
The SBA review conducted in 2011, found that overall implementation is progressing but more still needs to be done. Transfer of businesses, when successful, on average secures a higher number of jobs than those created by new start-ups. Particular recognition should be given to family businesses because of their typically local base, socially responsible attitudes, and balanced combination of tradition with innovation. As regards business failures, it was pointed out that about one third of business failures occur in the context of a business transfer. In response, the Commission undertook to identify best practices to support business transfers and launch a campaign to promote these practices, and invited Member States to develop user-friendly and widely supported marketplaces and databases for transferable businesses and provide training and support to increase the number of successful business transfers, including communication campaigns to raise awareness of the need for early preparation of business transfers.
Currently these issues are at the very heart of the Europe 2020 Strategy and the associated Flagship Initiatives that provide a focus for policy development at a European level. In particular, these strategic frameworks very much define the context for actions intended to promote an improvement in the framework for business transfers. Such actions however, also need to take into account a relatively well-established legacy resulting from earlier initiatives related to transfer of business launched at both European level and in the Member States (Commission Communications of 1998 and 2006 , recommendations from different projects, studies and seminars related to transfer of business that has been carried out between 1994 to date ).
In the past ten years, a number of studies have highlighted the need for SME owners that intend to transfer their business to plan and prepare correctly for this event and therefore to have access to professional support during the transfer of their business when needed. Not only does a successful transfer require an understanding of an array of organisational, financial, fiscal and legal issues, it is also likely to put those involved under significant emotional pressure. Potential buyers may also need quality support.
Today, the availability of business support specifically relating to transfer has still considered either low or moderate. In several countries there appears to be very little support, there are few national programmes that have been successful in tackling the business transfer market as a whole, initiatives have often been instigated for one particular transfer phase, at local or regional level or they have been short-term projects. In some countries, the initiatives that are available are mainly organised privately.
The lack of data on business transfers is also an issue of concern as it may results in a lack of support for governments to produce and implement specific policies to facilitate business transfers. Within this context, it becomes clear that there is a lot of potential value in creating a common approach, methodological tools and indicators, leading to the development of a regular common monitoring mechanism for business transfers in Europe.
This initiative is based on the Commission Implementing Decision C(2013) 8202 of 26.11.2013 amending Implementing Decision C(2012) 9442 concerning the adoption of the 2013 work programme for the implementation of the Entrepreneurship and Innovation Programme, pursuant to European Parliament and Council Decision No 1639/2006/EC establishing a Competitiveness and Innovation Framework Programme — CIP (2007-2013).
Call 118/G/ENT/CIP/13/E/NO1C06
Taking into account the above, on 18/12/2013, the European Commission issued Call for Proposals 118/G/ENT/CIP/13/E/NO1C06, focusing on one of the following priority areas:
a) Creating trans-European models/training modules for advisors in business transfer to support the development/improvement of their skills and methods in addressing different issues that arise during the transfer process (including the psychological and emotional aspects of transfers), and adapting them to different national contexts;
b) Developing standards related to buyer-seller platforms to ensure the quality of the services provided by the platform;
c) Proposing a model of an efficient awareness-raising programme for better planning and preparation of business transfers;
d) Proposing measures to improve and harmonise data collection methods on transfer of business across Europe.
DANAE Project
The provision of assistance by specialised advisors is often considered as a key factor for the success of a business transfer attempt. The type and complexity of necessary advisory services in general depend on the peculiarities of the business sector(s) involved, the relevant legal framework to be applied in the process, the complexity of the transfer process, as well as the type of business to be transferred. Nevertheless, in any case, the presence of an impartial and adequately specialised advisor may act as a catalyst in the transfer process.
In this context, DANAE project main objectives comprise mainly the following:
- Creating a trans-European training framework for advisors with diverse skills and expertise in business transfer, as a means to develop a competent pool of skilled professionals, specialised in the field of business transfers,
- Developing a credible European accreditation/ certification framework for advisors in business transfer, as a means to provide businesses wishing to engage in a business transfer process, with a reliable pool of credible certified advisors.
- Creating a European Centre of Excellence in the thematic area of business transfers, whereby certified professionals in the field of business transfers, accredited organisations, policy makers, academics, et al., may be provided with – and assisted by – specialised resources, leadership, best practises, exchange of know-how, research, support and continuous training and improvement of skills.
DANAE project scope & objectives fall directly within the corresponding scope & objectives of Priority Area 1 of the “Transfer of Business” Call of Proposals. In particular, DANAE project objectives comprise the following:
- developing a, replicable throughout Europe, training and certification model for advisors in business transfer, through appropriately accredited organisations, which is inter alia expected to: a) assist advisors to correctly address various issues that are likely to occur during the transfer process and b) provide an improved environment for business transfers and quality of advisory services for business transfers on the whole range of issues that may arise during transfers.
- setting-up of a European Centre of Excellence in business transfer, which is inter alia expected to: a) ensure continuous improvement of skills and expertise in the examined thematic area on a European level, b) act as a specialised and adequately organised multiplier and disseminator and c) safeguard the sustainability and further enhancement of DANAE project results, following successful project conclusion and termination of EU funding,
- performing extensive dissemination actions, which are expected to raise awareness among advisors, small business owners, policy makers and the wider public, with respect to the benefits of business continuity through transfer.
At the same time, DANAE project is considered to be fully relevant with of selected target groups and final beneficiaries (indirect target groups), since its components are designed in such a way, so to fully meet the characteristics and needs of the latter. This assumption, which is being further analysed in the succeeding paragraphs, can be supported by the following indicative table:
| Target group needs and characteristics – issues to be addressed | DANAE project content and output |
|---|---|
| Limited specialisation of advisors in business transfer issues | Focused training model |
| Geographical distribution of advisors | Web-based delivery method |
| Diverse academic and professional backgrounds | Development of certification model |
| Need for continuous adjustment to market signals | Set up of Centre of Excellence |
| Need for further support and knowledge transfer | Set up of Centre of Excellence |
| Limited awareness by stakeholders | Extensive dissemination activities |
| Geographical distribution of stakeholders | Use existing networking capabilities |
The Athens Chamber of Commerce and Industry
7, Academias Street
GR-10671
Athens, Greece
London South Bank University
Université Catholique de Lyon
IST Studies