Business succession: No longer just a family affair in SMEs in the MEM industry

In many companies in the MEM industry, a generational change is foreseeable in the next five to ten years. Swissmechanic, the association of Swiss MEM SMEs, clearly identified this in its latest member survey: 49 percent of companies definitely expect this to happen, while a further 17 percent consider it likely. Despite this clear situation, almost half have not yet addressed the issue in concrete terms, while 28 percent are already in the middle of the process and 26 percent have taken the first steps.

The question of an internal family solution presents a mixed picture. While 33 percent are open to an internal handover in principle, 42 percent consider it out of the question. The main reasons for this are the next generation's different career interests (28 percent) and a lack of suitable successors (26 percent).

Topic loses importance

Swissmechanic points to a decisive risk factor for the future viability of Swiss industrial companies: the traditionally preferred option of family succession is becoming increasingly less common. What was still considered standard practice a few decades ago is now becoming increasingly rare. This change is not unique to Switzerland, but part of a global trend – and SMEs in the MEM industry are no exception.

Companies cite the search for suitable successors as the biggest challenge (28 percent), followed by financing and company valuation (23 percent) and legal and tax issues (14 percent). The association interprets these developments as a reflection of the increasing complexity of entrepreneurial responsibility, particularly when it comes to financial requirements and the wide range of skills that today's successors must possess. Although 66 percent of companies feel very well or fairly well prepared, around a quarter consider themselves to be poorly prepared or not prepared at all. The need for support therefore remains high.

Stop the trend

Swissmechanic sees the results as a clear signal: entrepreneurship no longer has the same importance for younger generations in industrial companies as it did in the past. The association sees this as a challenge to the long-term competitiveness of the industry and intends to step up its efforts to halt this trend or, where possible, reverse it. The association's members also expect this: 59 percent would like Swissmechanic to become more involved in the area of succession planning.

Source: Swissmechanic