Paperjam has compiled an online dossier on transferring or taking over a business. Philippe Depoorter, Head of services for businesses and entrepreneurs and Family Practice leader at Banque de Luxembourg, shares his view.
Anyone who takes over a company takes on much more than a tangible legacy of working tools, real estate, products, etc. They also take over a history, values, a set of practices, networks, a reputation... all the elements that make up its intangible value. For the new owner, neglecting these aspects will mean missing out on the business's intrinsic value - and thus the key to its success. It is vital to take account of a company's intangible value during a change of ownership. Yet the evidence shows that this is not always the case.
“Anyone who takes over a business without considering
what really makes it unique
will lose out on its intrinsic value.”
Nowadays, a good portion of a business's capital is made up of intangible assets like brands, information, knowledge and expertise. In other words, “all the hidden assets that don't appear in the accounts but will help to ensure the future profitability of the business,” explains Alain Fustec, co-founder of 'Observatoire de l'immatériel'. For example, customer data is a tangible asset for a company. It has the potential to create revenue. But behind every client, every sale, there is an image, a relationship, a reputation, a set of practices, etc. Anyone who takes over or buys a company, especially a family business, without considering what really makes it unique will lose out on its intrinsic values... and will undoubtedly be disappointed.
Client history, expertise, values and practices
For the strategic management of a company, the question of how to place a figure on intangible assets has become crucial. But besides this accounting challenge, it is important to uncover the essence of the company's uniqueness. This demands a process of revelation and communication. You need to know what unites the company as a social unit, what holds its employees together and what drives them in their shared venture. You need to understand the mindset that enables them to create products and offer services that differentiate them from their competitors.
“Our approach is based on four pillars:
history, expertise, values
Banque de Luxembourg's approach is based on four pillars: our clients' history, expertise, values and business practices. These elements must be revealed before the intangible value of the company can be understood, taken over and preserved.
Click here to read the full Paperjam dossier on transferring or taking over a business.