Generational succession is always the critical process for the continuity of family businesses over time – in fact, according to studies, the weight of small and medium-sized family businesses in Spain – as in Japan – is very significant. In ur country, 70% of family businesses do not manage to reach the second generation, and almost 90% do not reach the third, due to multiple factors.

The upcoming years are the time for the "baby boom" generation, with"boomers" born between 1946 and 1964 who are reaching theirretirement age, and with it a large number of the founder entrepreneurs who created and continued many of the companies that have been the base our current economy: they are inevitably retiring, many without generational successors, without family members who can and want to take over the succession.

The countdown has begun: in the absence of natural succession, they are compelled to simply close and liquidate... And in the face of this scenario "companies in search of an owner" emerge – they are estimated at around one million SMEs, many of them profitable and with good prospects.  Founding partners and/or their management teams face this challenge. The situation is worse when it comes to individual entrepreneurs, whose retirement leads almost inevitably to layoffs.  The business culture strongly linked to thepersonality of the founders is a key factor to take into account place in these cases.

In addition, companies below a minimum size have increasing difficulties inviability and survival – and to solve this in the time necessary to maintain the presence in the market, growing just organically, is not enough.

The continuity of the family business without generational change is possible if a process of sale or integration with another company is undertaken sufficiently in advance to prepare and complete  a process of these characteristics, to allow to optimize and realize the company value, at the right time – reducing the risk that the passage of time and inaction simply make the business fall like ripe fruit without the owners realizing a good part of the value generated, which will be collected by the competitors at "0" cost. There are several ways, depending on the circumstances of each person, each entrepreneur, and each company.

Below are a few tips to address a scenario of lack of successors:

- Firstly, it is essential to perform a through, internal analysis, honest self-assessment on the situation, if possible, shared between the founder(s) and the management team more closely involved in the business.  

- Evaluate scenarios, like: (a) transferring the business to a management team, or hiring of external directors to manage the company, while maintaining some percentage of ownership in the hands of the family, leading the transition either by consolidating themselves as new owners, or for sale to other companies in the sector, or, when the appropriate size is reached, to investors or venture capital / private equity funds; and/or (b) Directly going to market: the sale of the business, capital increase to integrate new partners – e.g. financial, managerial, etc. – and corporate operations of mergers, acquisitions involving the business are key instruments for business continuity beyond their creators, and at the same time, this will contribute to speed up a much-needed process of consolidation of the business map of our country, giving rise to reinforced companies capable of being more competitive.  

- This will allow for calm and objective planning of the process, drawing up a roadmap, that includes gradual transition from full dedication to progressive retirement of owners, founders,  focusing in performing those functions whose value is the transfer of  knowledge, skills, contacts, experiences, etc. to the management team, involve and promote key persons, in short, materializing the transfer of role

- Take action: implement the roadmap outlined.

It is not an easy task, but it is not impossible either.  With the right planning and implementation, and with the right professionals to accompany the parties the entire process, from advice on planning to execution and implementation, it can be achieved.

The mindset of the "boomers" is not that of their parents or grandparents: The sale of the business, or the gradual transfer of control for an orderly transfer that preserves and enhances the value of the business is seen as the culmination of a career, a personal and professional project and a legacy for society at large.