Survey of Corporate Attitudes towards Business Succession (2020)
67.0% of companies see business succession as a management issue
— 8.9% of companies increased interest in business succession after emergence of COVID-19 —
Three years have passed since the Small and Medium Enterprise Agency formulated a “5-year Business Succession Plan” in July 2017, that is to be a period of intensive implementation of business succession support. Amid concerns about an increase in bankruptcies, closures and suspension of business due to the increasing impact of COVID-19, business succession is also garnering more attention than ever before as a measure to prevent these outcomes. The government is also providing aggressive support for smooth business succession, such as by providing “subsidies for handing over management resources” in order to support SMEs’ handover of their management resources.
Teikoku Databank has conducted a survey of corporate attitudes towards business succession. This survey was conducted in conjunction with the August 2020 TDB Trends Research.
*Survey period: August 18 – 31, 2020, Companies Surveyed: 23,689, Valid Responses: 12,000 (Response rate: 50.7%). The survey for business succession was first conducted in October 2017, and this is the 2nd such survey.
*Details of this survey can be found on the dedicated Economic Trend Survey website. (http://www.tdb-di.com).
Primary points of survey results(summary)
- 1 With respect to companies’ perspectives on business succession, 11.8% of companies “see it as a management issue of the highest priority”; by combining that with those “seeing it as one of the management issues” (55.2%), 67.0% overall see business succession as a management issue. 21.6% said they “do not see it as a management issue”, and 11.4% said they “do not know”.
- 2 When asked about changes in interest in business succession after COVID-19 emerged, companies saying “no change” accounted for the majority, at 75.0%: 8.9% said “increased”, while 2.3% said “decreased”.
- 3 With respect to whether a business succession plan exists or not, 18.7% of companies said they “have a plan and are advancing it”, and 21.1% said they “have a plan but have not yet advanced it”. While 39.8% of companies have a business succession plan, half of those have not yet advanced it. Those companies which see business succession as a management issue, or whose president is old, are more likely to have a business succession plan.
- 4 With respect to what one struggled with in terms of business succession, the “fostering of a successor” ranked top at 48.3% (multiple answers; the same applies hereafter). “Fostering of a successor” (55.4%) and “decision on a successor” (44.6%) were also highly ranked in terms of matters one may struggle with. On the whole, concerns about the issue of a successor are high on the list.
- 5 37.2% of companies said, they “are likely to be involved in M&A” as a means of business succession in the near future (within the next 5 years). By size, “large enterprises” accounted for 43.3%, which overtook the whole. “Small and medium-sized enterprises” and “small-sized enterprises” remained at 35.9% and 34.1%, respectively. In particular, there is a nearly 10-point difference between large enterprises and small-sized enterprises.