No Succession: Many SMEs Want to Close Their Businesses - Germany’s Mid-Sized Businesses Face Mass Closures by 2029 Due to Succession Crisis
A growing number of German mid-sized companies face closure due to a lack of successors. By 2029, up to 114,000 businesses could shut down each year as older owners retire. Many struggle to find buyers or family members willing to take over, with nearly half blaming excessive bureaucracy for the difficulties.
Over half of mid-sized business owners in Germany are aged 55 or older. Most do not intend to keep their companies running after they step down. A survey revealed that 47% cannot find a suitable successor, while 42% point to complicated paperwork as a major obstacle.
Owners who successfully pass on their businesses tend to reinvest more in growth beforehand. The average expected sale price for such a company has now reached nearly €500,000. Yet many deals fail due to unrealistic price expectations, poor documentation, or weak management structures. Experts highlight several key challenges: over-reliance on the owner, unclear processes, and delayed succession planning. Demographic shifts, a shortage of qualified buyers, and rising demands for capital and professionalism add to the pressure. KfW’s chief economist suggests that cutting red tape could encourage more startups and smoother transitions.
Without intervention, thousands of mid-sized firms may disappear in the coming years. Simplified regulations and better preparation could help secure their future. For now, many owners remain stuck between high expectations and a shrinking pool of successors.
