In the transfer of a company, as well as in the general development of a business, it is extremely important for the owner to emotionally detach from the company itself, stated Edvard Varda, CEO of Unconditional, at the panel ‘Myths about Company Transfer’ held as part of the 17th Lider Conference ‘The Future of Family Businesses’.
As Varda said, he is as an owner ‘still the biggest risk of his company’, but much less than five years ago, and the people he surrounds himself with are the best he has, and he works with them to take on responsibility.
– Today I present myself only by my name and surname. I do not mention the name of the company because I do not identify with it – said Varda.
This entrepreneur intrigued the audience when he said that the financial obligation in the company should be placed on the next generation.
– If my son wants to inherit the company, he will have to buy it. If you get everything, you won’t appreciate it and you won’t feel the urge to create something – said Varda, explaining that Unconditional is expected to have 600 employees by the end of the year and that it is his responsibility to ensure the future of the company.
Regarding sales, Varda emphasized that successful transactions depend on trust and compatibility of partners, not just on the valuation.
Speaking of sales, the director at Provectus Capital Partners, Silvijo Radušić, discussed how private equity funds add value to family businesses.
– When someone looks at a fund as an investor, they expect financial support from us, but we add value where founders have not thought or dared; through M&A and recognizing missing functions – claims Radušić. This fund manager highlighted that Croatian entrepreneurs often overlook M&A as a growth tool.
– We saw in the research that very few entrepreneurs use M&A for growth. Here we see space to add value – says Radušić, adding that the fund’s goal is to see what is sustainable and how to proceed with the business.
Mirjam Marasović Ćurčić from Forvis Mazars emphasized that preparing a company for a transaction is actually a process of strengthening the ability to generate long-term profits. Marasović Ćurčić also emphasized operational discipline.
– Besides sales growth, it is important to discipline costs and standardize processes, define who can approve what, and digitize systems – said Marasović Ćurčić. She added that key people must go in the same direction.
– If key managers do not live the company’s vision and do not show results through numbers, value is lost before the transaction occurs – says Marasović Ćurčić.
Legal and contractual challenges in ownership transfer were commented on by Vice Mandarić from the law firm Schoenherr.
– Our job is to identify red flags and show them to the buyer. Often younger colleagues see too many red flags, but experience teaches that most can be resolved contractually – said Mandarić. He added that conflicts of corporate cultures cannot be resolved solely with paperwork.
– The company must be able to function without the founder. Therefore, you need to clean your house. It is a tedious job, but necessary if you want to seriously prepare for sale – explained Mandarić.
Mandarić also highlighted the importance of cooperation with the owner who remains in the company.
– If the owner stays in the company, we want him to benefit from it because he is the best person who can continue to work on developing and growing the company – added Mandarić.
The Biggest Risk – Silence
In the business of family companies, the biggest risks are often not in the market, taxes, or competition. The most expensive risk lies in silence. Sentences like ‘We’ll talk about it another time’ or ‘It’s not the right time yet’ sound harmless, but in reality, they represent a postponement of problems that do not disappear over time.
In family businesses, the most sensitive topics are often those that are least talked about: ownership transfer, distribution of roles, responsibilities between generations, boundaries between family and business, and the issue of trust, explained Dr. Srđan Šimac, president of the Croatian Association for Mediation, at the Lider Conference ‘The Future of Family Businesses’, who has been helping family businesses open topics that are most often silenced for years. His focus is not on who is right, but on how to preserve relationships and ensure the future of the business.
– Conflicts rarely stay behind closed doors at home. They often spill over into business, relationships with partners, banks, and employees, and the long-term stability of the company. What starts as an unclear expectation among family members can end in decision-making blockages, slowing down investments, or damaging reputation – emphasized Šimac.
Founders are not afraid of the transition, he said, but are afraid of the position they will find themselves in after the transition, and this requires a lot of understanding. Heir successors, on the other hand, struggle for recognition, for their value, and for management decisions. Both with clients and suppliers.
– The company is an extension of personality, and it is a big question for founders what will happen after they transfer management powers – emphasized Šimac.
It was precisely about this real, operational dimension of conflict that he spoke one-on-one with Marijana Širić Sabljo, the financial director of Weltplast, who first talked about what transition means to her.
– For the transition, the founder must first prepare himself, then everyone else. The transition is not just signing a contract, but a symbiosis that lasts several years – said Širić Sabljo, stating that there is no need for traumatic transitions. The founder has invested both effort and sacrifice into his company, and the successors who take over the business should be grateful for that, she believes, but we also need to understand that the founder has an emotional connection to the company that is like a child to him.
– The founder often loves the company more than his children, wife, and mistress. He identifies with it, he is a big shot there, and this is, it must be said clearly, an addiction. And the biggest problem for an addict is to realize that he needs help. Then he will experience withdrawal symptoms – she vividly described, noting that in this ‘crisis’ founders often make moves they should not. This means that time must pass for the transition.
– After taking over management functions, the founder must just start working for the company – she believes.
When asked what the biggest fears of successors are, she replied that they have no fear because they do not know what awaits them. She noted that at the Lider Conference she heard the best message and remembered Varda, who advocates selling ownership to children. She believes that such transparency ensures longevity.
– When the children are small, a family code should be made about entering the family business, and the family should adhere to and respect it – stated Širić Sabljo, adding that children should be introduced to what awaits them, and if they decide to fight for it, great, that is the right direction. If they do not want to fight, then that is clear too.
Mediation is a luxury if you believe it will solve your problem. If you need expert help, but at the head of the process should be the key decision that implements the most important decisions, it will be too expensive, concluded the interlocutor.
