Company Evaluation & Succession Planning of a family business
Succession planning in a family business represents an important and crucial phase in the lifecycle of a company and is an important strategic task for every entrepreneur.
Riccardo Farsaci, 2018
Bachelor Thesis, Linea Alessandro SA
Betreuende Dozierende: Karl Schaufelbühl
Keywords: succession planning, company evaluation, cashflow projection, market value, Management Buy-In, liquidation
Linea Alessandro is a boutique in the center of Lenzburg, specialized in exclusive Italian fashion brands. Currently, the company counts its 37th year of business and enjoys great trust and loyalty from their clients. In regard to the age of the founders, who are approaching retirement, the question surges what strategic options are available in order to extract an economically attractive succession or exit solution. Since both sons are not planning to enter into the succession of the company, the founders are forced to ﬁnd family-extern solutions for the succession of Linea Alessandro.
First, a swot and pestle analaysis is provided in order to observe the internal as well as external environment of the company. Furthermore, various methods to determine the company value are applied and compared in order to establish a price range. The methods are elaborated in an excel ﬁle, which is provided to the client and designed in a way that assumptions and parameters can be adjusted for various scenarios. Subsequently, to examine the current market situation and gain some additional insights, interviews with business brokers have been conducted to further support the literature research.
The analysis has shown that the company is in a stable situation and is able to prevail in a difﬁcult market environment. The valuation methods have deﬁned a price range that serves as a foundation for any succession strategy. However, the calculations are based purely on assumptions that must be clariﬁed for plausibility in a negotiation with a potential buyer. The available data shows a gap in transparency and important changes are made to evaluate the value. In order to substantiate these assumptions, it is unavoidable that in the future transactions with a negative impact on the business will be included in the income statement and correctly recorded. Furthermore, the ﬁndings help to better understand the current market situation and correspondingly, highlight the most probable options available to the client when it comes to retirement. The elaborated liquidation plan presents a reasonable structure with strategically deﬁned milestones.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance