Family businesses are typically overvalued by their own leadership – by approximately 30%

Passing on businesses in Switzerland is becoming a strategic issue at national level. According to a survey carried out by Bilan, Finanz und Wirtschaft and the School of Management Fribourg – in partnership with Lombard Odier – nearly 90,000 Swiss businesses will change management within the next few years. This is creating a tangible risk – nearly one-third of these businesses could vanish if no buyer can be found.

At a time when passing businesses on within the family is no longer the norm, it is essential to put planning in place, along with a realistic company valuation and structured family governance, to ensure the long-term viability of family businesses. This is of particular importance in Switzerland, where family businesses are an important part of the economic fabric.

These were the central themes at an event held recently at EHL Hospitality Business School, which brought together family businesses and their Next Gen leaders, with a focus on those who had taken part in the survey.

Carole Hubscher, CEO of Caran d’Ache, Nicole Conrad, Senior Vice President at Lombard Odier, and Xavier Bonna, Managing Partner at Lombard Odier, shared their experiences at a debate moderated by Frédéric Thomasset, Editor in Chief of Bilan.

Keeping it in the family?

In the early 2000s, 60% of family businesses were passed on within the family – that figure is now down to 40%. This reflects a profound shift in attitudes towards entrepreneurial inheritance, Nicole Conrad explained. “The way entrepreneurs see things, passing a business on within the family is seldom viewed as a real transfer. This lack of clarity contributes to a form of denial, which hampers preparation.”

The way entrepreneurs see things, passing a business on within the family is seldom viewed as a real transfer. This lack of clarity contributes to a form of denial, which hampers preparation

Today’s Next Gen are freer in their professional choices than their forebears. Having enjoyed varied educations, and often pursued external careers, they regard taking on the family business as just one option among several, rather than a duty. The survey shows that only 14% of young people who take on a business get involved from the time they are a student.

As Carole Hubscher noted, the topic of business succession is likely to be ever-present in the minds of both the current and next generation, making it important to tackle the subject early. “We started discussions with our children from the time they were teenagers. We put together a family charter in a fun way, and held regular workshops.” This allowed the children to learn how to hold discussions and take decisions together, so as to be better equipped for the future, whether they decide to take on the family business or not, she explained.

We started discussions with our children from the time they were teenagers. We put together a family charter in a fun way, and held regular workshops

Carole Hubscher, president of Caran d’Ache

Succession planning – too often a rarity

The complexity of the succession process is often underestimated. The survey shows that 47% of businesses have taken no action to prepare for a handover. Just 11% report that they have finalised a succession process.

For Jürgen Fritz, professor at the School of Management Fribourg, who is cited in the special dossier published in Bilan, this is partly due to a clash of priorities – whether to put the family first or to prioritise economic interests. The emotional aspect that accompanies such decisions can slow down the process of formalising a plan.

The lack of preparation can also be seen in uncertainty over who will take over – only 28% of businesses have identified a buyer and 20% are holding discussions. In the vast majority of cases (93%), the ability of potential successors is the key factor, well ahead of any considerations of gender or order of birth.

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“At Lombard Odier, the College of Partners that runs the Group is made up of representatives of the founding families, talented people from inside the company who have helped to build up our success over the long term, and external talent with a fresh way of looking at things. Balance and diversity are a strength that allows us to combine tradition and innovation,” shared Xavier Bonna.

“Another important part of our model is having active shareholders. The term ‘Managing Partner’ implies our partners are fully engaged in running the Group. When they retire they hand over their shares to the next generation,” he explained.

At Lombard Odier, the College of Partners that runs the Group is made up of representatives of the founding families, talented people from inside the company who have helped to build up our success over the long term, and external talent with a fresh way of looking at things

Valuing a business: the gap between perception and reality

Valuation is a constant sore point in the process of passing on a business. Half of the directors questioned for the survey believe they know what their company is worth, but evidence suggests there is often a gap between this perceived valuation and market reality.

Speaking at the event, Maxime Dubouloz, Director Corporate Advisory at Lombard Odier, provided critical insight. “People may think they know what the value is, but that figure is often far removed from the economic reality of the market. At many SMEs the value is still based largely on the person of the director.”

A study by the University of St. Gallen suggests the average overvaluation is 30%. This problem is compounded by the fact that children taking on a business expect a discount of around 60%, which injects a further level of tension into negotiations within families. For Nicole Conrad, this shows the need for an external and independent opinion: “Too often the emotional value distorts the equation. You need a neutral valuation to act as a basis for a healthy discussion.”

The Family Business event organized by Bilan at EHL Lausanne, on 9 October 2025

Capital and heirs: the risks of a vague strategy

Alongside operational matters, the question of how to divide the capital is often one of the most sensitive. According to the study, just 32% of companies have set a clear strategy for dividing the capital between heirs – 42% have taken no action.

For Maxime Dubouloz, this is a structural risk. “A lack of strategy can cause tensions in the family, delay decision-making and put the continuity of the business at risk. You have to identify who the legitimate buyer will be, while at the same time ensuring a degree of fairness within the family. Tax also plays a major role.”

Reaching a settlement with siblings who are not active in the business is another key concern. In other countries, innovative solutions like bringing in private equity funds make it possible to buy out the heirs who are not involved. This type of arrangement is still rare in Switzerland, however.

According to the study, just 32% of companies have set a clear strategy for dividing the capital between heirs – 42% have taken no action

Tackling succession early

Passing on a family business has to be seen as a strategic and long-term process, requiring forward planning, objectivity and a structured approach.

Putting a realistic value on a business, appointing a capable successor, organising family governance, and planning how to divide up the capital: all of these are key issues which, if handled well, will safeguard not only the continuity of the business but will also ensure that the family remains united.

This is no small challenge at a time when the Swiss economy is about to go through one of the biggest waves of business handovers in recent history. But those running family businesses are not on their own. In addition to strategy consultants and tax advisors, many Swiss banks, Lombard Odier among them, have built up expertise in supporting entrepreneurs and their families in the handover phase to ensure wealth remains secure for the long term.

Study methodology

The study cited in this article was carried out jointly by Bilan, Finanz und Wirtschaft and the School of Management Fribourg, with the support of Lombard Odier. It is based on responses from 499 Swiss businesses in 23 sectors. 52.7% of the businesses questioned have between 10 and 49 employees; 3.8% have over 250.