Succession Planning Challenges in Germany's Mittelstand

This whitepaper discusses the succession planning challenges faced by Germany's Mittelstand, highlighting a significant gap between the number of small and medium-sized enterprises (SMEs) intending to transfer ownership and those considering closure. By the end of 2025, approximately 215,000 SMEs plan to hand over ownership, while around 231,000 are contemplating shutting down due to an aging owner demographic. The average age of owners is above 54 years, with 54% being 55 or older. The document outlines the low preparedness levels among these firms, noting that only 26% have a named successor. It emphasizes the need for early planning, recommending a structured approach to succession that includes starting a three-year runway for preparation. The whitepaper also addresses the mismatch between sellers and potential buyers, indicating that the scarcity of qualified successors complicates the transfer process. The findings suggest that proactive planning and engagement with potential successors are essential to mitigate the risks of closure and ensure successful transitions.