One in three owners of small and medium businesses in Croatia above the age of 55 mostly do not think who to leave their business to or what will happen with it after they retire, shows a survey on business transfers, presented earlier in the week.

This is the first survey of this kind, its author Mirela Alpeza, director of the Centre for Small and Medium Business Policies and Development, said while presenting the findings.

The survey covered 200 owners of small and medium businesses and its findings are mostly shocking, she said.

There are as many as 16,590 companies in Croatia whose owners are above 55 and those companies employ 179,000 people. Thirty-two percent of those business owners own 5,300 companies, employing 57,000 people and they are an especially risky group because they do not understand changes that will occur after they retire, she said.

"The relevance of the issue of business transfers is additionally emphasised by the large number of management transfers that are to happen in the next five years in companies founded in the 1990s," Alpeza said.

The survey shows that 47% of business owners are aged 55-60 and that 53% are aged 61 and above.

As many as 92% of business people in the age group 55 and above are owners and founders of their business, 5% bought their business, 2% inherited it, and one percent acquired it in some other way. As many as 88% of the surveyed business people have an ownership share and a management position in their company. Also, 97% of those business owners have children, 38% run family businesses whose management involves their child, spouse or someone else, and 62% of the surveyed companies are non-family businesses.

Asked about possible changes of ownership and managerial positions, as many as 24% of business owners said they were not considering them, 26% said they believed those changes would happen in five to ten years, and 23% said they would happen in the next three to five years.

Asked about the future of their business after they withdrew, two-thirds of the surveyed business people said their businesses would continue operating, 17% said they believed they would close down, and six percent said they believed they would be sold. Twelve percent said they did not think about this at all.

Sixty-one percent of the surveyed business people said they believed their business would be taken over by someone from their family, 19% said this would be done by one of their staff who was not a member of their family, and 12% said a new manager would be appointed.

Sixty-eight percent of the respondents said they already knew the person who would possibly replace them. Fifty-nine percent intensively discuss with their children the future of their business, while 18% do not have such discussions at all.

Alpeza said also problematic was business people's perception of the time needed to transfer the management of a company, with 22% of respondents believing that it took less than a year, 50% believing that it took from one to three years, 22% believing that it took four to five years and 6% being of the opinion that it took more than five years.

Based on the survey findings, Alpeza recommended launching campaigns to raise awareness among older owners of small and medium businesses of the complexity of business transfer processes and the importance of timely preparation.

In the EU 450,000 companies with two million employees every year undergo the process of business transfer. In 150,000 of those companies, that process is not approached appropriately, which puts at risk around 600,000 jobs.

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.