Medium-sized businesses: More and more entrepreneurs are unable to find a successor

According to the state bank KfW, 231,000 medium-sized businesses in Germany are at risk of going out of business this year due to a lack of a successor solution. Never before have so many owners who are planning their own withdrawal considered shutting down their business, says the KfW banking group, which has been regularly collecting data from medium-sized businesses for more than 20 years. Compared to the survey a year earlier, the number increased by 67,500.

“A rapidly growing number of entrepreneurs who want to retire from working life (keyword: baby boomers) are encountering persistently low interest in starting up businesses,” says the development bank’s analysis. “Above all, there are too few interested parties who would like to take over an existing company.”

Age is the main reason for going out of business

In the medium term, within three to five years, around 310,000 entrepreneurs who already know that they are leaving their company are considering closing down. The main reason is age: according to KfW calculations, the average age of medium-sized entrepreneurs in this country is 54 years, 39 percent are 60 years or older.

The 215,000 entrepreneurs who want to arrange their succession in the short term by the end of 2025 are on average 65.4 years old. “There are massive gaps in the management levels of medium-sized companies,” concludes KfW medium-sized business expert Michael Schwartz. It can be assumed that 43,000 of the 215,000 companies will probably not be able to implement their wish for a short-term succession plan – at least not at the planned time. According to KfW, there are a total of 3.84 million small and medium-sized companies in Germany.

Analysis KfW on company succession KfW communication January 10, 2024