SUCCESS ROAD
Mazovia Development Agency S.A. implemented the project "Enhance the Competitiveness and Sustainability of European SMEs through succession procedures and models” with the acronym SUCCESS ROAD under the INTERREG EUROPE programme. Phase I ran from 1 August 2019 to 31 January 2022, Phase II (implementation) until 31 January 2023.
Budget: EUR 859,840.00 (EU funding of 85%)
Project objectives
In a market economy, small and medium-sized companies created by individual entrepreneurs play a particularly important role. The vast majority of family businesses operate in the SME sector. Family businesses are the most natural form of entrepreneurship and are the engine of development in any economy. They constitute the most numerous group of companies in Poland and should be treated as the basis of sustainable economic growth.
Statistics show that the succession of business ownership between generations can be a situation that threatens the existence of many businesses in Europe: only 30% of family businesses survive the transition to the second generation, and only 10% of these will make the transition to the third generation. Success Road aimed to help manufacturing companies in the textile, clothing and footwear industries prepare for and carry out their transition, both in the context of family succession and when selling to third parties.
The overall objective of the project was to help national and regional authorities to implement policies and new measures to support succession in their operational programmes, so that SMEs can better face the transition phase and secure their future after a change of ownership. Actions to strengthen the overall sustainability and long-term viability of European SMEs will contribute to the growth of the economy by preserving jobs and stimulating economic growth.
What were the specific objectives of the project:
- To analyse the gaps between the current and desired state of business succession and transfers and to explore the parameters and obstacles.
- To sensitise regional and local policymakers and civil servants to the problems and risks associated with the succession process in order to support the creation of tools to help business owners through the succession process.
- Shaping a business-friendly legal and institutional ecosystem by creating incentives and removing barriers to entrepreneurship.
What were the expected outcomes of the project:
- Building the capacity of key staff of partners, stakeholders and policy makers through inter-regional workshops, local stakeholder group meetings and staff exchanges that will enhance their ability to identify and address challenges to improve policy instruments.
- Development of 4 integrated regional action plans with the support of stakeholders and in cooperation with regional authorities to propose changes and measures for a seamless transfer and succession process.
- 4 policy learning guidelines on identified priority themes to improve policy instruments, ensure regional sustainability and influence decision makers in other regions.
- Improvement of 4 policy instruments in Greece, Lithuania, Poland and Spain.
Consortium:
- Ministry of Development and Investments (GR) - Leader
- European Footwear Confederation (BE)
- Lithuanian Innovation Centre (LT)
- AVECAL – Valencian Association of Footwear Entrepreneurs (ES)
- The Valencian Institute for Entrepreunarial Competetiveness (ES)
- Hellenic Clothing Industry Association (GR)
- Mazovia Development Agency Plc (PL)
Project results:
The implementation of the project has provided an opportunity to confront theoretical assumptions with the actual state of awareness regarding the understanding of the importance of the succession process and all aspects related to it, both among entrepreneurs in the SME sector and representatives of local authorities. Thanks to the exchange of experience between project partners, we have obtained a comparative scale facilitating recognition of the actual scale of the problems faced by local authorities in the Mazovia region. The most important element, however, turned out to be the work with the actors involved in the Local Stakeholder Groups, which are directly related to the SME environment. The most important conclusions we obtained are the following:
- SME entrepreneurs (in general) understand the succession process in a simplistic way, overlook and selectively treat key challenges and are unfamiliar with the methods of handling them;
- SME family business owners (in general) do not understand the paradox of the family business system;
- There is a need to support the SME sector (including family businesses) in legal, tax, financial and accounting, management (e.g. assessing the status quo in one's own business, business risks);
- There is a need to support the SME sector (including family businesses) in areas such as: communication and information flow in the family, conflict resolution, building a business strategy, division of competences, preparation and career planning of successors, ways to protect the existing owner, but also property succession without business succession - "non-family" companies;
- There is a need to continuously educate local government representatives and sensitise them to the problems of businesses (including family businesses) operating in the region;
- There is a need for closer cooperation between local authorities and non-governmental entities working for family businesses (in the field of succession);
Identifying these problems became the starting point for creating a Regional Action Plan to improve the situation in the region. It was inspired by the good practices identified in the project and the exchange of experiences with partners and local stakeholders.
The actions described in the Regional Action Plan were formally integrated into the policy instrument, the RIS Implementation Programme 2021-2022, following its revision in 2022. A new task has been included in the RIS 2021-2022 IR: Promotion of Succession Knowledge in Mazovia. This task has three main objectives:
- raising the level of knowledge of entrepreneurs in the field of the succession process, including, above all, the legal norms in force related to it;
- increasing the level of knowledge of representatives of local authorities and public sector employees and introduction to the issue of succession in the SME sector;
- disseminating information on the importance of succession planning for maintaining business activity and ensuring its effectiveness and competitiveness.
These objectives were achieved through the following activities defined in the Regional Action Plan:
- Organisation of 4 training courses/events/workshops for entrepreneurs from the SME sector;
- Organisation of 4 trainings/events/workshops for representatives of local authorities and business environment institutions;
- Organisation of a meeting (Cross Meeting) for entrepreneurs of the SME sector, representatives of local authorities and public sector, NGOs and Business Support Institutions;
- Newsletter - 4 steps to succession.
Four meetings were organised for entrepreneurs, attended by 85 representatives of entrepreneurs from the SME sector. The following meetings were organised:
- "Family owned firms on the way to building multi-generational family businesses".
- "Change of owners in a business - sole proprietorship and companies".
- "Family-business crisis under the magnifying glass of a lawyer - or a story that could happen".
- "Succession through the eyes of a psychologist"
Meetings were held for Local Government Units, with 84 local government representatives attending.
A bridging meeting was also held entitled. "Succession in family businesses. A Challenge for Entrepreneurs, Local Governments and Business Environment Institutions," which was attended by 44 representatives of SME entrepreneurs, representatives of local authorities and the public sector and NGOs.