Succession in the German Mittelstand 2026: what the KfW succession monitor really shows

Every year, KfW Research measures the state of succession in Germany's Mittelstand, the small and mid-sized companies that form the backbone of the economy. The edition of 9 January 2026 is the clearest warning yet: for the first time, more owners plan to close their business when they retire than to hand it over. At the same time, the study shows that handovers which are planned are well prepared. The gap lies in between.

Key numbers at a glance

• Germany has 3.87 million Mittelstand companies.
• By the end of 2026, around 243,000 owners plan to stop without a successor. Around 186,000 aim for a handover in the same period.
• By the end of 2029, 569,000 plan to close (about 114,000 a year) and 545,000 plan a succession (about 109,000 a year).
• One in four Mittelstand companies (25 percent) is considering a deliberate closure.
• 57 percent of owners are 55 or older, more than 2 million people. The average age is just over 54, up from 45 in 2003.
• Owners who want to hand over by the end of 2026 are 66.5 years old on average.
• The average asking price is around 499,000 euros, 34 percent more than in 2019.

2026 is a turning point

KfW Research considers company statements up to the end of 2026 very reliable, because the plans are concrete. That is exactly where the imbalance is sharpest: around 243,000 still active companies plan to leave the market by the end of 2026 without a succession, provided they follow through. That is just over six percent of all owners. Around 186,000, or about five percent of all SMEs, aim for a handover in the same period.

For the economy this means that this year more working companies leave the market than find new owners. Not because the business models fail. The study itself notes that in many cases the business model and the achievable price would justify searching for a successor.

Why owners close instead of handing over

KfW Research asks for the reasons behind planned closures, with multiple answers possible. The 2025 ranking:

• Retirement age reached: 52 percent.
• No interest within the family: 47 percent.
• Too much bureaucracy, including tax and law: 42 percent, up from 22 percent in 2023.
• Search for a successor unsuccessful: 21 percent.
• Business situation prevents a sale: 17 percent.
• Search for a successor too demanding: 11 percent.

Two things stand out. Bureaucracy as a reason has almost doubled in two years. And relatively few fail after an unsuccessful search. Many never start searching. Owners who rule out the family and shy away from the effort quietly decide on the end. In our experience this is where support has the greatest effect: before the decision is made.

Which succession routes owners prefer

Most owners with succession plans still prefer a solution within the family. Selling to an outside buyer remains the second major route. What is new is that management buy-outs are gaining attention again: 24 percent consider handing over to co-owners (MBO), 28 percent to employees (employee buy-out, EBO).

For external successors this matters. The family drops out more often and openness to outsiders grows. The route is more demanding, though: the study notes that with external solutions information gaps are larger and search, planning, valuation and negotiation take more time.

What a Mittelstand company costs

For the first time since 2019, KfW Research asked about asking prices. For handovers by the end of 2029, the average target price is around 499,000 euros, up from around 372,000 euros in 2019. That is 34 percent in nominal terms and about 9.5 percent after inflation.

• More than half of owners aim for 500,000 euros or less.
• More than one in four companies with succession plans sets the price above 1 million euros.
• On average the asking price is 1.2 times annual revenue. The median is 0.6 times.

The wide gap between average and median shows that a few high valuations pull the average up. For most companies the amounts are much smaller than the headline suggests. For successors, many companies are within reach with solid financing. For owners, a realistic and well-founded valuation is an early and decisive step. Asking prices are wishes, not market prices.

What this means for owners

• Decide early, before age decides for you. If you want to hand over at 66, start in your early sixties.
• Ask the family openly, but do not plan on it as the only option. Outsiders and employees are real alternatives.
• Prepare the numbers. Accounts, contracts and dependencies build trust and make a price defensible.
• Share the bureaucracy. Tax, law and financing belong with experienced specialists.
• Treat closure as a deliberate choice, not the default. The company is often worth more than you think.

What this means for successors

• The supply is there. Hundreds of thousands of companies with customers, a team and cash flow will need new leadership in the coming years.
• Time is short. Owners who want to hand over by the end of 2026 are 66.5 on average. They are looking now.
• Preparation is the lever. Financing, industry knowledge and a clear profile shorten search and negotiation.
• Relationship before transaction. Owners hand over a life's work. Trust often matters more than the last euro.

How we want to close the gap

The study describes a matching problem. On one side are companies that run well and find no one. On the other are people who want to be entrepreneurs and start from zero. Nachfounder is a programme like an accelerator, but for companies that already exist. We prepare successors for the takeover, match them with the right companies and guide the process in stages. No M&A advisory.

If you are thinking about your succession, the Nachfolge-Check gives you a first assessment with concrete next steps in a few minutes. If you want to take over, write to us. The best startup is already 40 years old.