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For an owner-operated business, there is one question of the utmost importance in business succession: Who will take over the company? Previously, when it came time to hand over the reins, a close relative almost always took control. Nowadays, more than a few companies are unable to find a successor among the owner , s relatives. If there is no successor in the family, there are three main options: a sale to an external third party (mergers and acquisitions [M&A]); a sale to directors and other company insiders (management buyout [MBO]); or transfer of ownership to a company insider. If none of these options is taken, the final alternative is shutting down the business. In a steadily rising number of cases, owner-operated companies without a successor are the target of M&A deals. This is clearly a viable option. Meanwhile, business transfers via MBOs are starting to become more prevalent, but this method does not generally have a high profile, and success requires meeting a number of prerequisites. A major advantage of business succession through an MBO is that financial leverage enables the purchase of shares with little of the buyers , own capital, but risk is unavoidable in such schemes. Accordingly, the managers taking over a business need willpower and enthusiasm strong enough to take on the challenge even if they have to take on some risk. In addition, it is essential to carefully scrutinize any potential transaction in consultation with experts about diverse funding sources and the right balance among them. Fund procurement is not just a matter of where to obtain the funds and under which conditions. There are other important considerations. By making use of investors such as private equity funds, funding can be obtained while simultaneously diversifying risk and strengthening the business foundation. Another option is using an employee stock ownership plan to reduce the amount of funds procured and motivate employees. From a different viewpoint, business succession via MBO offers many options other than just the acquisition of shares by the management involved in the takeover. Other options include combining some of the directors , and employees , shareholdings or consolidating diverse shareholdings to concentrate management control before transferring the business to a family member. Such schemes are already being structured and implemented. Looked at in this way, it is fair to say that MBOs are a viable option for business succession and are in fact already being used. Unfortunately, it is also clear that this is not a one-size-fits-all method. Those planning to take over a business via an MBO need to have a thorough awareness of the risks involved and must meet the prerequisites of strong willpower and fervent enthusiasm. Also necessary to succeed is solid planning following careful analysis in consultation with experts.