Yrityskauppa ja strateginen uudistuminen

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Selling business in portions : strategy for focusing and adapting to the changes

Objectives Although acquisitions and business exits have been studied widely, there are very few studies which concern the business deals as a growth strategy from the perspective of seller. Mainstream growth business research as well as business transfer studies are concentrating on the growth of the firm from buyers’ perspective. However, in practice it has been found that there are firms which are selling portions of businesses, either directly to improve the operating performance or to get resources, by which the remaining activities in the firm evolves and grow. This paper focuses on SMEs and strive to understand, what are the motives of the seller to sell a portion of the business and what is happening in the firm after this. The main objective is to clarify how sales of the portion of firm's business affects the development and growth of the firm. Secondary objective is to find out the process of transfer in three stages, the situation before business transfer, the transfer itself as a process and development of the firm after transfer. The data was collected by interviewing seven managing directors of firms, which have sold a portion of their business during the past 10 years. Prior Work The growth of the firm can be measured by several indicators, such as turnover and/or number of employees. In addition, the growth of firm is the result of the firm’s success, which can be explained and measured by indicators in two areas: financial performance indicators, and indicators of the development of the business. (Sorama et al., 2015). To sell a portion of the business may be a way to seek better profitability, which allows the growth of the firm later on. Steffens et al. (2009) argued that profitability before growth is better path than growth and then a wish to achieve profitability afterwards. The acquisition may have a short term negative impact on the firm’s financial performance (Varamäki et al., 2012b), but sale of a portion of the business may, in turn, affect vice versa. Entrepreneur’s motivation has an instrumental role in creating new business, buying and selling business as a part of a broader strategy on entrepreneurship (Amaral, Babtista & Lima, 2009; Birley & Westhead, 1994; Sto-rey 1989). On the other hand, large firms are buying smaller rapidly growing firms and the owner of rapid growth firm owned other firms, too (Sarasvathy, Menon & Kueche, 2013). For this reason, it is important to distinguish between the entrepreneur, business and enterprise and the strategies: entrepreneurship strategy, business strategy and corporate strategy. The sale of a business portion can be seen as a strategic arrangement. If the firm’s competitive advantage in one business area is not strong enough, the sale of it can strengthen firm’s other business areas. Sale of the business portion might relate the profitability orientation, which consequently, aims to increase the financial resources of the firm for future growth. Approach Research data consists of seven semi structured theme interviews, case descriptions based upon them and the content analysis. As the research seeks to understand the phenomenon and expand the theory, we use a case study strategy and theme interview method. The case study provides an opportunity for diversity with-out trying to simplify it too much. Case study is suitable particularly when the phenomenon is atypical, but the researchers want to generate a new understanding and development targets. We sought for the cases in which the firm has sold a portion of its business and continue operating with the remaining business from different sources. The data was gathered from 7 entrepreneurs in the region of Southern Ostrobothnia in Finland. The themes of the interview were gathered on the basis of researchers pre-understanding, the existing literature and the research group’s previous studies of business transfer. The main themes were the following topics: Activities before and during the sale process • factors that relate to the business • business planning activities • previous experience to purchase or sale the firm • implementation of the business transfer The firm after the sale • the development of business after sale • the future of the firm • the likelihood of new acquisitions • what advice the interviewee give to an entrepreneur who is planning to sell a business. Results In the firms with only one owner, the personal motives for selling portion of the business activities are high-lighted even though they also include elements connected with business and market conditions. In these cas-es, the goals for development are often connected with the needs of the entrepreneur. In the firms with sev-eral owners, the motives for selling are often connected with the corporate strategy. There are often clear growth and development goals after the business transfer. In this study, business transfer as a process is rather quick, especially when the target business activity has been prepared well in beforehand. It seems that difficulty of letting go is not connected to selling portion of firm's business in the same way than it is when the whole firm is sold. Targets set to the sales of business activity seemed to get fulfilled well. The development and growth of the firm has mostly been successful in the cases where they were the targets/motives for selling. The recession has hampered the growth, but there has been some development. Selling portion of firm’s business activities may enable better allocation of resources and allow entrepreneur to concentrate on the more promising business activities. In addition, it may help to exit business activities which are not yielding profit or require unjustified amount of resources. Selling a business activity or selling the firm in portions are options for closing down the firm. Selling busi-ness activities in portions does not to seem be very common, but those who have done it, have positive experiences. Both personal and firm level motives have been fulfilled. Implications and Value Entrepreneur Selling a portion of firm's business activities is a solution to multiple needs and situations. When the entre-preneur is considering retirement, selling business as smaller portions can help to relieve the pain of aban-donment. The gradual abandonment can increase the capacity of the entrepreneur to concentrate better on the remaining business and extend the entrepreneurial career. The sale of a difficult portion of the business may motivate entrepreneur to develop the remaining business. Firm and strategic renewal From the firm’s perspective the capital from the sale will benefit the development and growth of remaining business. Firm may use available resources more efficiently by focusing on more profitable and more ap-propriate business. Instead of terminated and run down portions of the business, they can be packaged into resource bundles which have greater value for buyer than to the seller. Strategic focus and concentrating on core businesses Business sprawl cause resource shortages, which can be discharged by selling off business resource glut-tons. When evaluating the firm’s businesses, it should be kept in mind that the excess of one firm is core business to another. In addition, some may have ability and willingness to invest in to which the other does not have assets

Omistajanvaihdosasiantuntijuus ja sen kehittäminen

Omistajanvaihdosten valtakunnallisen koordinoinnin tavoitteena on tukea yritysten omistajanvaihdospalvelujen ja palveluprosessien kehittymistä erityisesti mikro- ja pienten yritysten tarpeisiin. Elinkeinopolitiikan linjausten uudistamisen yhteydessä omistajanvaihdokset ovat tulossa olennaiseksi osaksi yritysten kehittämistä ja kasvua. Erityisen ajankohtainen haaste suomalaiselle yrityspalvelujen kehittämistyölle on suurten ikäluokkien siirtyminen eläkkeelle. Omistajanvaihdospalvelujen tarve on kasvamassa ja niitä tarvitsevat myös mikro- ja pienet yritykset. Omistajaa vaihtaneiden liiketoimintojen kehittymisen edellytyksenä on ammattimaisesti toteutettu onnistunut omistajanvaihdos. Kehittämistyössä on huomioitava sekä ostajien että myyjien tarpeet ja omistajanvaihdosten moninaisuus: sukupolvenvaihdokset, yritysten väliset kaupat, henkilöiden väliset kaupat jne. Tarvitaan osaava ja koko Suomen kattava palveluverkosto, jossa ovat mukana yhteistyössä julkiset ja yksityiset toimijat. Selvityksen tavoitteena on kuvata sekä omistajanvaihdosasiantuntijuuden että omistajanvaihdosten palveluprosessin nykytilaa ja kehittämistarpeita. Huomion kohteina ovat omistajanvaihdostutkintoon, omistajanvaihdosasiantuntijoiden auktorisointiin ja sertifiointiin, omistajanvaihdosasiantuntijuuden luvanvaraisuuteen sekä omistajanvaihdosten palveluprosessiin liittyvät alan asiantuntijoiden näkemykset. Selvityksen tulosten pohjana olevan kyselyn vastausten laadusta ja määrästä olemme erittäin ilahtuneita. Kyselyyn vastasi edustava joukko yksityisiä ja julkisia toimijoita. Tässä yhteydessä haluamme kiittää kaikkia kyselyyn vastanneita ja toivomme toimijoiden välisen vuoropuhelun jatkuvan ja vahvistuvan

Management control systems in small business transfers : a resource-based view

This study investigates whether post-business transfer MCS development (PBTMCSD) is associated with post-business transfer success (PBTS) in small firms. The data for the study was collected in January 2012 as a web-based survey. The target group consisted of acquirers (both external buyers and family business successors) who had implemented a business transfer during 2006-2011 in Finland. A total of 178 questionnaires were sent out, and 67 responses were received. Regression analysis is used to investigate the relationship between PBTMCSD and PBTS. We utilize both resource-based view (RBV) and contingency theory. The results indicate that PBTMCSD has a positive and significant relation with PBTS. Our findings highlight the importance of PBTMCSD even in small companies in the context of business transfer. However, the relationship between PBTMCSD and PBTS performance was stronger for firms with five or more employees as well as firms with previous experience of business transfers