The continuity prospects of SMEs have improved from the situation in 2021. Entrepreneurs over the age of 60 who are facing a change of ownership believe more strongly than before in the realization of a business acquisition or a generational change. Joka Viides, however, estimates that there will be no successor to the business. The information comes from a study by Seinäjoki University of Applied Sciences.
In Finland, there are tens of thousands of small and medium-sized enterprises, which, due to the aging of the entrepreneur, should be made to take over the responsibility of a new leader in the next few years, either through a business acquisition or a generational change. Otherwise, the risk is the end of business operations and the loss of jobs.
The construction industry in RT has the largest number of SMEs in the infrastructure sector. Many INFRA ry companies are currently thinking about how to ensure the company's continuity through a change of ownership.
Success in a change of ownership can be regionally of great importance, for example from the point of view of local availability of infrastructure services.
"Finding a successor creates a good cycle for companies"
The Change of Ownership Barometer implemented by Seinäjoki University of Applied Sciences investigated the assessments of entrepreneurs over 60 years of age about the future of their company when the current main owner gives it up.
Based on the results of the respondents
- 47 percent estimate that they will sell their company to an outsider (44% in 2021)
- 24 percent aim for generational change, i.e. plan to transfer the company to a successor found within the family (19% in 2021)
- 20 percent believe that business operations will end completely (27% in 2021).
Vice Chancellor of Seinäjoki University of Applied Sciences Elina Varamäki emphasizes the importance of a good continuity perspective in the development of the company.
"The earlier the company's successor is known, the more likely it is that the company will be in good shape at the time of abandonment. Finding a successor creates a good cycle for companies: they have stronger growth goals than other companies, operations are developed with a purposeful approach and they are more successful than others. "Board work is also most likely to be invested in companies where the successor is already known", says Varamäki.
The results predict a turnaround for the SME sector
According to Statistics Finland, the total number of company share deals and generational changes fell from 4 to around 300 in 3–500. According to preliminary data, the downward trend will continue in 2019. The number of closed companies has been significantly elevated for a long time.
The results of the barometer give reason to expect a turn in the downward direction of the statistics.
"Improving companies' continuity prospects is an important positive signal for the entire Finnish economy. Ownership changes are a prerequisite for the continued operation of viable employer companies and the preservation of jobs. In addition to that, changes of ownership have been studied to accelerate the growth and renewal of companies", says the chairman of the Owner Change Forum Jari Huovinen From the Confederation of Business.
"According to the barometer, about half of the entrepreneurs who have changed ownership report an annual turnover growth of at least 10 percent, while about a third of the other entrepreneurs reported growth," adds the head of Ov-forum's operational activities Anneli Komi About Finnish Entrepreneurs.
In autumn 2024, 1 companies responded to the change of ownership barometer, implemented for the fifth time. The previous barometer was implemented in 476.
The barometer was implemented by Seinäjoki University of Applied Sciences in cooperation with the national Owner Exchange Forum. The implementation has been financed by the TT Foundation and the Töysä Säästöpankki Foundation.
INFRA ry, representing the infrastructure sector Rakennusteollisuus in RT, is a partner of the Ov-forum. The partnership makes the forum's networks, advice and training easily available to members.
