Buying a business in Switzerland: how to find the right opportunity and avoid pitfalls

Why buy an existing business in Switzerland?

The acquisition of an existing business presents significant advantages compared to pure start-up creation. You immediately access operational cash flow, considerably reducing the financial risks of the first years of activity.

Concrete benefits include an established customer base generating revenues from day one, trained and operational teams, proven processes, as well as commercial relationships already established with suppliers and partners. You also inherit tangible assets (equipment, premises, stock) and intangible assets (brand, reputation, know-how).

The Swiss SME market offers particularly fertile ground. The quality of Swiss businesses, their financial solidity and their positioning in high-value-added niches make them attractive acquisition targets. Moreover, the stable legal framework and quality infrastructure facilitate successful transitions.

To discover how Leez supports buyers in their search for opportunities, explore our platform specialising in Swiss business succession.

Step 1: Define your acquisition criteria

Before launching into active searching, it is essential to clearly establish your ideal buyer profile. This preliminary clarification will prevent you from wasting time on unsuitable opportunities and allow you to focus your efforts on truly relevant targets.

A rigorous definition of your criteria also facilitates communication with intermediaries, advisers and specialised platforms who can propose targeted opportunities corresponding exactly to your search.

Sector of activity and expertise

The choice of sector of activity constitutes the first determining criterion. Ideally, favour a field you already know or which corresponds to your professional skills. Your sectoral expertise will enable you to better evaluate the business, identify development opportunities and anticipate specific challenges.

Ask yourself the right questions: in which sector do you have experience? What are your professional passions? Which markets seem promising to you? Are you ready to invest time to learn a new sector, or do you prefer to capitalise on your existing expertise?

Don't forget that certain sectors require specific licences, certifications or qualifications in Switzerland. Ensure you can meet these regulatory requirements before committing.

Budget and financing capacity

A realistic assessment of your investment capacity is crucial. Calculate precisely your available equity, your bank borrowing capacity and any investors you could mobilise.

In Switzerland, valuation multiples for SMEs generally range between 3 and 5 times EBITDA (earnings before interest, taxes, depreciation and amortisation), depending on the sector, size and quality of the business. An SME generating CHF 200,000 EBITDA could thus be valued between CHF 600,000 and CHF 1,000,000.

Caution: the purchase price represents only part of the total investment. Also plan for transaction costs (legal advice, audit), post-acquisition working capital requirements and a safety reserve for the unexpected in the first months.

Size and geographical location

Define the business size you are targeting in terms of annual turnover, number of employees and operational complexity. A micro-business with 5 employees and an SME with 50 staff do not require the same managerial skills or the same time investment.

Geographical location also deserves consideration. Some activities require a daily physical presence, whilst others can be managed remotely. Consider your personal constraints, your willingness to relocate and the importance of proximity according to the business model.

In Switzerland, cantonal differences (taxation, regulation, labour market) can significantly influence the attractiveness of a location. Integrate these parameters into your thinking.

Step 2: Find acquisition opportunities

Once your criteria are clearly defined, the active prospecting phase begins. Several complementary channels allow you to identify businesses for sale in Switzerland, each presenting specific advantages.

The effectiveness of your search will depend on your ability to intelligently combine these different sources and maintain active monitoring of the business succession market.

Specialised succession platforms

Specialised platforms constitute the most effective channel for identifying qualified opportunities. Leez stands out as the reference platform in Switzerland for business succession, offering access to verified listings, a secure process and a guarantee of confidentiality.

The advantages of a platform like Leez include: qualified listings with detailed financial information, a structured process facilitating exchanges between sellers and buyers, a secure data room for sharing sensitive documents, and expert support throughout the process.

Other channels also exist: regional commercial exchanges, advertisements in specialised press, or general websites. However, the quality and reliability of information varies considerably according to sources.

Professional network and direct approach

Your professional network represents a valuable source of opportunities, often even before they are officially placed on the market. Chartered accountants, business lawyers, financial advisers and professional associations frequently know managers considering a succession.

The direct approach to businesses not officially for sale can also bear fruit. Some managers approaching retirement have not yet formalised their sale project but would be open to a discussion with a serious and motivated buyer.

The Leez expert network connects you with qualified professionals (fiduciaries, lawyers, consultants) specialising in business succession, thus multiplying your chances of identifying the right opportunity.

Opportunity selection criteria

Faced with the multitude of opportunities, a rigorous initial sorting is essential. First check consistency with your previously defined criteria: do sector, size, location, budget correspond to your project?

Then assess the quality of the listing: transparent financial information, a detailed description of the activity and a professional presentation are generally the sign of a serious seller and a well-managed business.

Identify warning signals from this initial phase: continuous decline in turnover, excessive dependence on a single client, obsolete equipment, ongoing disputes, or vague reasons for sale. These elements are not necessarily deal-breakers, but deserve particular attention during in-depth analysis.

Step 3: Analyse the target business in depth

Once an opportunity has been identified, the in-depth analysis phase begins which will determine your investment decision. This multidimensional assessment must cover all aspects of the business to enable you to understand precisely what you are buying.

Never rush. Rigorous analysis at this stage will save you costly disappointments after acquisition. Take the necessary time and don't hesitate to seek the expertise of professionals for technical aspects that exceed your skills.

Financial analysis

The examination of accounts over the last 3 to 5 years constitutes the foundation of your assessment. Analyse the evolution of turnover, profitability (gross margin, EBITDA, net profit), cost structure and cash flows.

Pay particular attention to necessary adjustments: does the current manager's salary correspond to the market? Are there exceptional non-recurring charges? Are related-party rents practised? These adjustments are essential to obtain a faithful picture of real profitability.

Also assess the financial structure: level of debt, quality of customer receivables, stock rotation, working capital requirements. An apparently profitable business but consuming a lot of cash can pose post-acquisition challenges.

Operational assessment

Understand in detail the production or service processes: how does the business create value? What are the key stages? Where are the potential bottlenecks?

Identify critical dependencies: does the business depend on a limited number of suppliers? Do one or two clients represent an excessive share of turnover? Are certain key skills held by a single person?

Assess the quality of teams: skills, seniority, social climate, dependence on the current manager. Also examine the systems and technologies used: are they up to date or will they require significant short-term investments?

Competitive position and market

Analyse the business's competitive positioning: what are its distinctive advantages? Why do customers choose it? How does it compare with the competition in terms of price, quality, service?

Study sector trends: is the market growing, stable or declining? What technological, regulatory or behavioural developments could impact the activity? Are there threats of disruption?

Identify the growth potential: what development opportunities could you exploit after acquisition? New markets, new products, operational optimisations, digitalisation? This forward-looking vision will justify your investment.

Legal and regulatory aspects

Verify the business's legal structure: corporate form, shareholding, articles of association, minutes of meetings. Ensure that all licences and authorisations necessary for operation are in order and transferable.

Examine current contracts: commercial leases, customer and supplier contracts, employment contracts, partnership agreements. Identify change of control clauses that could pose problems during succession.

Search for potential disputes: ongoing proceedings, customer or supplier litigation, employee claims. Also verify regulatory compliance: sector standards, data protection, health and safety at work, environment.

Step 4: Conduct rigorous due diligence

If the preliminary analysis proves conclusive, you will enter the in-depth due diligence phase. This formal and structured stage aims to verify and deepen all information collected, identify hidden risks and confirm (or adjust) the valuation.

Due diligence represents your last opportunity to discover problems before committing definitively. Investing time and resources at this stage is infinitely less costly than managing unpleasant surprises after acquisition.

What is due diligence?

Due diligence (acquisition audit) is an in-depth investigation process enabling verification of the truthfulness of information provided by the seller, identification of hidden risks and confirmation that the proposed valuation is justified.

Two levels are generally distinguished: light due diligence (pre-offer) which validates essential elements before formulating an indicative offer, and in-depth due diligence (post-LOI), conducted after signing a letter of intent, which exhaustively examines all aspects of the business.

Main objectives include: confirming historical financial performance, validating valuation assumptions, identifying hidden liabilities, assessing legal and tax risks, and understanding post-acquisition operational challenges.

Key areas to audit

Complete due diligence covers several complementary dimensions. Financial due diligence verifies the quality of accounts, the reality of assets and liabilities, and the sustainability of cash flows.

Legal due diligence examines regulatory compliance, the validity of contracts, potential disputes and intellectual property issues. Tax due diligence identifies latent tax risks and optimises the transaction structure.

Don't forget operational aspects: commercial due diligence (customer portfolio solidity, pipeline), HR (employment contracts, social climate, key talents), and IT (information systems, cybersecurity, software licences).

Each area requires specific expertise. Calling on qualified professionals (lawyers, chartered accountants, sector consultants) is essential for quality due diligence.

Tools and support for due diligence

The secure data room offered by Leez considerably facilitates the due diligence process. This confidential digital space allows the seller to share in a structured manner all necessary documents (accounts, contracts, legal documents) whilst tracking access and preserving confidentiality.

Support by specialised experts is crucial. A business lawyer will examine legal aspects, a chartered accountant or auditor will analyse finances, a sector consultant will assess operational and strategic aspects.

The Leez expert network puts you in contact with professionals experienced in business succession, guaranteeing quality support at each stage of your due diligence.

Step 5: Negotiate and finalise the acquisition

The negotiation and finalisation phase transforms your acquisition project into legal and operational reality. This stage requires both firmness on your essential interests and flexibility to build a win-win agreement with the seller.

The quality of negotiation and structuring will determine not only the price paid, but also the conditions for your future success: payment terms, guarantees, transition period. Every element counts.

Valuation and acquisition price

Several valuation methods coexist: earnings multiples (EBITDA, net profit), discounted cash flow (DCF), or asset-based approach (revalued net assets). Each method presents advantages depending on the type of business.

To negotiate the price, rely on the results of your due diligence: identified risks, necessary investments, working capital adjustments. Justify your offer with factual elements and market comparables.

The Leez valuation tool helps you estimate the market value of a business according to several recognised methodologies, thus facilitating the preparation of your offer and negotiation with the seller.

Transaction structuring

The choice between asset deal (purchase of assets) and share deal (purchase of shares) significantly impacts tax, legal and financial aspects. The asset deal allows selection of assets and benefits from tax depreciation, whilst the share deal simplifies operational continuity.

Payment terms can be structured creatively: full cash payment, deferred payment (earn-out linked to future performance), or vendor loan. These mechanisms allow risk sharing and facilitate financing.

Negotiate guarantees and protection clauses: liability warranties, indemnification clauses, escrow accounts. These mechanisms protect you against post-acquisition discovery of undisclosed liabilities. Legal support is essential to secure these aspects.

Transition period and handover

Negotiate a support period by the seller, generally 3 to 6 months. This presence will facilitate knowledge transfer, continuity of commercial relationships and your gradual takeover of the business.

Carefully plan communication to stakeholders: announcement to employees (timing, reassuring message), information to key clients (guaranteed continuity), and notification to suppliers and partners. Clumsy communication can generate concerns and departures.

Prepare a detailed integration plan for the first 100 days: immediate priorities, quick wins to achieve, changes to make, relationships to build. This preparation will determine your ability to create value quickly after acquisition.

Pitfalls to avoid when acquiring a business

Even with rigorous preparation, certain frequent mistakes can compromise the success of your acquisition. Knowing these classic pitfalls will help you avoid them and maximise your chances of success.

For a complementary perspective, also discover frequent mistakes on the sellers' side, which will enable you to better understand transaction dynamics.

Overestimating your turnaround capabilities

The classic mistake consists of buying a business in difficulty thinking you can easily turn it around. Whilst the attractive price may be tempting, turnaround generally requires sharp sectoral expertise, significant financial resources and considerable time.

Be honest about your real capabilities. Do you have the necessary operational experience? Do you have the financial resources to absorb losses during the turnaround period? Have you precisely identified the turnaround levers?

For a first business purchase, favour a healthy and profitable company rather than a "turnaround project" which could quickly transform into a financial black hole and personal nightmare.

Neglecting company culture

Company culture and management style constitute critical factors often underestimated. A major gap between your approach and the existing culture can generate resistance, demotivation and departures of key talents.

Take time to understand the values, working methods and team expectations. How are decisions made? What is the degree of autonomy? What importance given to work-life balance?

Anticipate your transition approach: gradual changes vs brutal transformation, transparent communication, team involvement. Human capital often represents the most precious asset of an SME; preserving it must be an absolute priority.

Underestimating working capital requirements

The fatal mistake: using all your available capital to finance the purchase price, without providing a reserve for post-acquisition cash requirements. Result: you quickly find yourself in financial difficulty despite a potentially profitable business.

Working capital requirements (stock, customer receivables, supplier debts) must be permanently financed. Moreover, the first months post-acquisition often generate additional needs: deferred investments, transition expenses, possible temporary activity declines.

Prudent rule: keep a cash reserve equivalent to 3-6 months of operating expenses after acquisition. This safety margin will enable you to serenely manage the transition period and inevitable unexpected events.

Rushing without complete due diligence

Competitive pressure or enthusiasm can push you to skip stages of due diligence. "The opportunity is exceptional", "other buyers are interested", "the seller wants to conclude quickly"... Beware of these pressures.

Incomplete due diligence exposes you to considerable risks: hidden liabilities, undisclosed disputes, major operational problems, overvaluation. Post-acquisition nasty surprises always cost infinitely more than the time and expert fees invested in rigorous due diligence.

Maintain your discipline: if the seller refuses to give you the necessary time for in-depth analysis or limits your access to information, consider this as a major warning signal justifying abandoning the opportunity.

Expert advice to succeed in your acquisition

To maximise your chances of success, here are the essential recommendations from business succession professionals:

• Define your clear investment thesis: why this business, why now, how will you create value? This clarity will guide all your decisions.
• Surround yourself with experts from the start: business lawyer, chartered accountant, sector consultant. Their fees represent an investment, not a cost.
• Favour quality over quantity: better to analyse in depth 3-4 truly relevant opportunities than skim through 20 files.
• Build a relationship of trust with the seller: succession is as emotional as it is financial. Show your respect for what they have built.
• Plan the transition from negotiation: support period, communication to teams, identified quick wins. Post-acquisition success is prepared before signing.
• Remain humble and patient: buying the right business takes time. Don't rush into an average opportunity through impatience.

As experts emphasise, preparation and methodology are the keys to success in any business succession transaction.