Assessing stakeholders’ needs and expectations: A business transfer matchmaking-platform from a marketing perspective

Even though almost half a million companies in Europe are transferred every year, only 30% of family-owned businesses manage to complete this process successfully. Therefore, a matchmaking platform to facilitate national and transnational business succession was developed as a part of the Interreg ENTER-transfer project (Interreg Central Europe, CE 1158). In this article, the authors present the platform, its planned functionalities, as well as feedback which was collected from future users and public authorities (i.e. future “customers”). To ensure maximal functionality of the platform and the fulfillment of stakeholder needs, which are prerequisites of a successful go-to-market and high future user frequency, qualitative interviews with public authorities and an additional 23 interviews with potential users from Austria, Croatia, Czech Republic, Slovakia, and Poland were conducted. Based on the data collected, the authors identified the prerequisites, motivations, essential infrastructure, cooperation possibilities, problematic elements, and specific consulting requirements necessary to develop and implement successful business ownership transfer. The analysis of the information gathered during the interviews as well as practical implications stemming from the data and its effect on the platform development and marketing will be presented in this article.

1 Introduction

Business transfers, especially for SMEs with a family ownership background, are a notable challenge (Schiefer et al. 2018, 2019; Griffeth et al. 2006; Varamäki et. al 2014; Malinen 2004). Alarming statistics (e.g. from the KPMG 2015 report, which states that only around a third of all family businesses made it to the second generation) and the diagnosis of the often insufficiently developed business transfer environment, especially in Central and Eastern European countries, were motivators for the project. Furthermore, the risk of business liquidations and job losses were a main reason for starting the ENTER-transfer project, aiming at building competence and awareness, as well as exchanging expertise at a European level. Since project findings and the literature (Whatley 2011; Lansberg 1988; Sharma et al. 2003) underline the importance of early planning and preparation for a successful business transition, one of the project outcomes, a so-called “Matchmaking-Platform” was designed to facilitate the business transfer process and appeal to as many “transferers” in need of information as possible.

Firstly, the ENTER-transfer project will be briefly presented. Secondly, an overview of the Matchmaking-platform, its potentials, functionalities and intentions will be provided. Thirdly, insights from the analysis of retrieved data about needs and expectations of potential users and public authorities from the project countries Austria, Croatia, Czech Republic, Poland and Slovakia will be given.

The main intention of the ENTER-transfer project (2017-2020) was to facilitate business succession at national and transnational level(s). The project aimed at developing innovative tools and services in order to streamline the business succession process and help to sustain family businesses. Moreover, the main project outputs are the above-mentioned matchmaking-platform for companies that seek succession, a toolbox with practical guidelines for both succession seeking companies and potential successors, and strategies for creating favorable conditions for business succession. All these project outputs need to be accepted by users on the market and therefore be presented in a user-friendly way. As presented in 2019, a considerable step forward was the development of a business succession model with information and self-evaluation functions (Schiefer et al. 2019, succession forms cf. Figure 1; succession phases cf. Figure 2). Moreover, a crucial goal was to raise awareness among future users and succession-supporting capacities of public bodies through training and regional strategies in all partner countries, strengthen skills and competences of young entrepreneurs, owners of family businesses and their descendants by offering targeted training courses (cf. the project-webpage online).

Figure 1: Different succession forms in the ENTER- transfer model

Source: Schiefer et al. (2019)

Figure 2: The four different business succession phases in the ENTER- transfer model

Source: Schiefer et al. (2019)

2 The “Matchmaking-Platform” – an approach to facilitating business transfers

According to the project concept, which was published internally in July 2019 by the Biz-up (Biz-up 2019), the matchmaking-platform (MP) is intended to meet the following goals:

• Firstly, it should serve as a marketplace for (family) businesses, potential successors and investors.
• Secondly, it should be a central point of information, offering links to relevant information.
• Thirdly, it should serve as a tool for awareness raising within companies, society and policy maker groups to ensure support from all sides and encourage an early start of the succession process.
• Fourthly, it should be a transnational platform, offering a bigger pool of potential matches and enabling cross-border cooperation.

In the past year, the platform has been programmed and tested in all partner languages (CZ, GE, HR, PL, SK) and English. The platform was launched at the end of April 2020 at www.entertransfer.com (Figure 3).

Prior to the detailed elaboration of the MP, it was crucial to collect data on the needs and expectations of potential users and public authorities. Therefore, quantitative (limesurvey, N=23) and qualitative (1-2 qualitative interviews per country, 7 in total) surveys were conducted. The findings are presented in the following two chapters.

Figure 3: Screenshot of the Matchmaking-Platform

Source: Authors

2.1 Assessment of public authorities’ needs and expectations

To assess the situation, needs and expectations in all project countries, and ensure the matchmaking platform’s fulfilment of regional requirements, its market acceptance and frequent use by target groups, the project partners conducted a maximum of two qualitative interviews with public authorities in each partner country, Austria, Poland, Slovakia, Czech Republic, Hungary, and Croatia. The structure of the interviews was designed to gather information about the following areas of interest:

• From your point of view, which problems in the area of business succession should a platform solve?
• What are necessary prerequisites that need to be covered, so that your region will benefit from such a platform? (language, international networking, etc.)
• How could you inspire your stakeholders/customers to use the platform? Which features would be convincing?
• In which areas could your infrastructure contribute to the intensive use of the platform? Opportunities for cooperation?
• What were the last two “cases” of business succession that you dealt with and what were the special (consulting) needs in those two cases?

According to the public authorities, the succession platform should provide business owners with information and guidance to make business transfers quicker and less complicated. It is essential to address topics such as family law, management, the process of selling a family business, the distribution of shares in the company in the case of sale (partial sale), or in the case of succession. In addition, the platform should include contact data of local, regional, national and European institutions which support entrepreneurs in the process of business succession. Successful examples of business succession cases with practical recommendations were regarded as a beneficial tool to provide essential information and share experience with individuals considering business transfer.

The most significant prerequisite to be considered in order to make the platform functional and beneficial was the availability of regional languages and English as a common language, to enable a high degree of acceptance and usage rate on the regional markets. Moreover, according to the Head of Regional Development Department of South Bohemia Regional Authority in the Czech Republic, a specific person should be assigned to provide assistance to potential candidates using the platform in case further information is needed. It is crucial that numerous institutions are involved and interconnected via educational events and counselling to disseminate and promote the platform among potential regional users. A high degree of data reliability and data quality ensure that the needs and requirements of potential users are met. To encourage stakeholders to use the developed platform, a combination of appropriate marketing communication channels is advised. Information can be effectively distributed not only during project activities, but as suggested by the NPC – National Business Centre in Slovakia, also through the project partners’ websites, partner institutions, social networks, direct contact with regional family businesses, and various events. Presenting the benefits of the platform and providing opportunities for interested parties to test it would increase the usage rate among stakeholders, which would otherwise be a challenging task after the end of the project.

The public authorities could provide infrastructure, promote the platform via existing regional networks and contribute to raising awareness and intensifying usage of the platform as well as promoting the project outputs and disseminating relevant information during regional events with stakeholders. Moreover, exchange of good practices would be an attractive feature resulting in a higher rate of platform usage, according to the RPIC PO – Regional Advisory and Information Centre Prešov, Slovakia.

2.2 Assessment of potential users’ needs and expectations

In addition to the public authorities, potential users of the matchmaking-platform from Austria, Slovakia, Croatia, Czech Republic, and Poland were asked to participate in an online survey. The sample included SMEs with (future) succession plans, which had been invited in the course of the project’s pilot actions. In total, 23 questionnaires focusing on the needs and expectations of potential users as well as perceived benefits and barriers were collected and analyzed in order to adapt platform development and marketing processes accordingly.

Potential users saw the possibility to get in touch with potential matches (82% ranked this criterion as important or very important) and the ability to select and filter businesses by specific criteria as the most significant benefit of the business succession matchmaking platform. Over 65% of participants also stated that it is important or very important to be able to obtain additional information and details about every business profile presented. More than 78% of potential users requested presentation of the platform in their local language as well as English.

Almost half of the respondents were unsure if they had ever even considered the possibility of cross-border business succession. Nevertheless, in the case of cross-border succession, the most beneficial service for the users seemed to be international legal consulting (65% of respondents ranking it as important or very important), followed by translation services (60.8%), and information on political and national economics (52%). The potential users were also asked to rank the criteria needed when presenting themselves on the platform for a potential successor. Almost 74% ranked the job description and the tasks expected to be taken on by the owner as the most relevant elements. This aspect was closely followed by location and business sector (70%), indication of price (60%), and number of employees (40%). The majority of respondents were willing to share information on the succession platform about their business sector, number of employees, and qualifications and experience required of the potential successor.

Approximately half of the users were unsure whether they wanted to share information about the planned time of succession and financial figures. Interestingly, information about market share was considered as confidential information by 35% (see Table 1.) The most significant barrier keeping the users from implementing the succession platform as a part of the business transfer was the worry about potentially fraudulent platform participants and lack of trust regarding data security.

* confidential: “This information is confidential. I would not present it at all on an online platform.”

** not sure: “I am not sure yet, if I would or would not present this information on an online platform.”

*** not confidential: “This information is not confidential. I would fully present this information on an online platform.”

Table 1: How much information are you willing to share on a matchmaking-platform?

Source: Authors

3 Conclusions and outlook

The authors of the article presented the matchmaking platform developed as an outcome of the Interreg Central Europe ENTER-transfer project as well as its specific functionalities. In order to ensure maximal fulfillment of user and stakeholder needs and expectations, the project partners conducted qualitative interviews with public authorities and 23 further questionnaires were filled in by potential users from the project region: Austria, Slovakia, Czech Republic, Poland, and Croatia. Based on the data collected, the authors were able to identify perceived benefits and barriers, as well as prerequisites, motivations, essential infrastructure, and specific consulting aspects necessary for successful development, implementation, and marketing of the platform. The benefits which the potential users perceived as the most important and which need to be effectively advertised to the target groups were the focus on family law, the process of selling a family business, management and the distribution of shares when selling the company or during succession. It is essential that the matchmaking platform includes contact data of local, regional, national, and European institutions which serve as a support network during the process of business succession.

Moreover, the most commonly stated need of potential users was the use of local languages in addition to English. The factors legal consulting, translation services and information on political and national economics proved to be crucial attributes and were, therefore, addressed on the platform. However, based on the feedback received by potential users, the platform faces potential hurdles, mainly with regard to the reluctance of users to provide information deemed as confidential, and also due to the unwillingness of users to consider business transfer across national borders. These barriers occur mainly due to a lack of information about data security measures and the possibilities of cross-border transfers and can be addressed and diminished by an appropriately designed marketing strategy and processes aimed at the dissemination of relevant information.

The matchmaking-platform was presented in May 2020. From this point on, it was necessary to communicate the information to potential users and maintain a high frequency of visits to the webpage. The Chamber of Commerce is usually the first regional contact point when looking for a business successor, so a future study of changes in the behavior of regional SMEs and family-owned businesses could be an indication of the success rate of the platform. Will the marketing strategy effectively communicate the benefits of the platform? Will the users consider international succession options offered by the matchmaking-platform? What will be the feedback regarding the usability of the platform? The future of the matchmaking-platform will provide insight into the openness of SMEs and family-owned businesses to implement online solutions for serious matters like a business handover.

Poznámky/Notes

This project was financially supported by the INTERREG CE ENTER-transfer program (CE 1158). We would like to thank all our project partners from Slovakia (EUBA, IPC), the Czech Republic (VSE, JVTP), Croatia (DUNEA) and Poland (ITeE-PIB) for their contributions. We would especially like to thank our Austrian project partner, Business Upper Austria, which was in charge of the development of the Matchmaking-platform.

Literatúra/List of References

1. Biz-up, 2019. D.T3.1.1. Concept and design of the matchmaking tool. Internal concept paper. July 2019.
2. Griffeth, R. W., Allen, G. D. and Barrett, R., 2006. Integration of family-owned business succession with turnover and life cycle models: Development of a successor retention process model. In: Exploring the Intersection of HRM and Entrepreneurship. 2006, 16(4), 490-507.
3. ENTER-transfer, 2020. Online web-appearance of the project. 2020. [online]. [cit. 2020-2-27]. Available at: <https://www.interreg-central.eu/Content.Node/ENTER-transfer.html>
4. KPMG, 2015. Modern times. In: European Family Business Trends, 2015.
5. Lansberg, I., 1988. The succession conspiracy. In: Family Business Review. 1988, 1 (2), 119-143. ISSN 0894-4865.
6. Malinen, P., 2004. Problems in transfer of business experienced by Finnish entrepreneurs. In: Journal of Small Business and Enterprise Development. 2004, 11(1), 130-139. ISSN 1462-6004.
7. Schiefer, J., Überwimmer, M. and Füreder, F., 2018. Obstacles and challenges of business succession in Central Europe. In: Conference Proceedings CCBC 2018, Steyr. ISBN 978-3-8440-5875-8.
8. Schiefer, J., Überwimmer, M., Füreder, F. and Wiesinger, S., 2019. Increasing success in transferring companies – a new holistic approach with the ENTER-transfer model. Conference Proceedings CCBC 2019, Steyr. ISBN 978-3-8440-6652-4.
9. Sharma, P., Chrisman, J. J. and Chua, J. H., 2003. Predictors of satisfaction with the succession process in family firms. In: Journal of Business Venturing. 2003, 18(5), 667-687. ISSN 0883-9026.
10. Varamäki, E., Viljamaa, A., Tall, J. and Länsiluoto, A., 2014. The success of SME business transfers – buyers’ and successors’ perspective. In: ICSB Conference. Dublin, Ireland. [online]. [cit. 2020-2-27]. Available at: <https://www.researchgate.net/publication/264093855_The_Success_of_SME_Business_Transfers_-_Buyers%27_and_Successors%27_Perspective>

Kľúčové slová/Key words

business transfer, matchmaking platform, Interreg Central Europe, stakeholders’ expectations

transfer podniku, platforma na vytváranie dohôd, Interreg Central Europe, očakávania stakeholderov

JEL klasifikácia/JEL Classification

G34, M31

Résumé

Posúdenie potrieb a očakávaní stakeholderov: Platforma na vytváranie dohôd o podnikovom transfere z marketingovej perspektívy

Aj keď sa každý rok prevádza takmer pol milióna spoločností v Európe, iba 30% rodinným podnikom sa podarí tento proces úspešne dokončiť. Preto bola v rámci projektu transferu Interreg ENTER (Interreg Central Europe, CE 1158) vyvinutá platforma na vytváranie dohôd s cieľom uľahčiť národné a nadnárodné obchodné nástupníctvo. V tomto článku autori prezentujú platformu, jej plánované funkcionality, ako aj spätnú väzbu, ktorá bola zhromaždená od budúcich používateľov a verejných orgánov (t. j. budúcich „zákazníkov“). Na zabezpečenie maximálnej funkčnosti platformy a splnenie potrieb zainteresovaných strán, ktoré sú predpokladom úspešného uvedenia na trh a vysokej budúcej frekvencie používateľov, boli uskutočnené kvalitatívne rozhovory s verejnými orgánmi a ďalších 23 rozhovorov s potenciálnymi používateľmi z Rakúska, Chorvátska, Českej republiky, Slovenska a Poľska. Na základe zhromaždených údajov autori identifikovali predpoklady, motiváciu, základnú infraštruktúru, možnosti spolupráce, problematické prvky a konkrétne konzultačné požiadavky potrebné na vývoj a implementáciu úspešného prevodu vlastníctva podniku. V tomto článku bude predstavená analýza informácií zhromaždených počas rozhovorov, ako aj praktické dôsledky vyplývajúce z údajov a ich vplyvu na vývoj a marketing platformy.

Recenzované/Reviewed

2. March 2020 / 9. March 2020