Finding a Successor: How Owners Secure the Right Handover

You rarely find a successor on your own — and almost never overnight. The search is the part of succession that takes the most time and is most often underestimated.

This article shows where successors actually come from, what makes a suitable successor, how a structured search process works and why discretion is decisive.

Where successors come from

Successors come from three directions. First, from within: from the family or from your own management team taking over the business (management buy-out). Second, from outside as a person: an experienced manager who joins and takes over (management buy-in). Third, from outside as a company: a strategic buyer or an investor buys the business.

Which of these routes suits you depends on goals, company size and financing. The overview of the basic options is given in “Succession Options”; the two management routes are compared in “MBO vs. MBI”. If no one from the family takes over, “Succession Without a Family Successor” explores the external routes.

What makes a suitable successor

The highest price does not automatically make the best successor. For many owners it matters just as much that the business, the employees and the location continue. A suitable successor brings three things: professional and entrepreneurial aptitude, the ability to finance the takeover, and an understanding of what makes the company what it is.

Especially with family-internal or management solutions: aptitude can be built, but not forced. Those who start early can train a successor over years — the most reliable route.

The search channels at a glance

For an external search there are several channels. Your own network — suppliers, competitors, customers, industry contacts — is often the first and most discreet. Public succession exchanges such as the WKO succession exchange bring supply and demand together, but are broadly scattered and not very confidential. And an M&A adviser approaches pre-selected interested parties in a targeted, anonymised way.

Channel	Reach	Discretion	Pre-selection
Own network	low	high	none
Succession exchange	broad	low	none
M&A adviser	targeted	high	yes

How exchange and adviser differ in concrete terms is set out in “Succession Exchange or M&A Adviser?”; the buyer search in a sale is deepened in “How Do I Find the Right Buyer?”.

Why discretion decides the outcome

If it becomes known too early that a business is seeking a successor, risks arise: employees grow uncertain, customers and suppliers ask questions, competitors exploit the situation. A structured process protects against this by releasing information to interested parties only after a confidentiality agreement and in stages. The search stays confidential until a serious solution is within reach.

How a structured search process works

An orderly process does not begin with the search but with preparation: clarify goals, value the company and make it fit for handover. Only then are suitable candidates identified, approached anonymously, informed under confidentiality and examined in discussions. The framework for this is set out in the overview of business succession and, where the route runs through a sale, in the “Selling a Company” guide.

The most common mistake — and how guidance helps

The most common mistake is to wait with the search until the exit becomes urgent — and then to rely on a single interested party. Those who talk to only one have no alternative and no negotiating position. An independent adviser identifies several suitable successors, preserves discretion and ensures that you can choose rather than having to accept.

If you are thinking about succession, sale or finding an investor: talk confidentially with IGCP Capital Partners — independent and discreet. → igcp.at

Frequently asked questions

How do I find a successor for my company?

Through three routes: internally (family or your own management), externally via a person (management buy-in) or externally via a company (sale to a strategic buyer or investor). The means used are your own network, succession exchanges and the targeted, confidential approach by an M&A adviser.

How long does the search for a successor take?

The search is the most time-intensive part of succession. Plan for several years — especially if an internal successor first has to be built up. Even an external search with pre-selection and discussions usually takes many months.

Which is better: a succession exchange or an adviser?

A succession exchange has broad reach but little discretion and no pre-selection. An M&A adviser approaches pre-selected parties anonymously and protects confidentiality. The two are not mutually exclusive but follow different logics.

Does the search for a successor have to be confidential?

In most cases, yes. If it becomes known too early that a business is to be handed over, it unsettles employees, customers and suppliers. A structured process releases information only in stages and after a confidentiality agreement.