The succession wave in German SMEs: why so many handovers are coming now

Germany is facing a major generational change. A whole generation of business owners will retire over the next few years, and hundreds of thousands of businesses face the same question: who carries on? This article puts the latest figures into context and explains why the wave is arriving now.

Key points at a glance

• 57 percent of SME owners are 55 or older, more than 2 million people (KfW).
• Through the end of 2029, around 109,000 owners a year want to hand their business over to a successor (KfW).
• At the same time, around 114,000 a year plan to close without a successor (KfW).
• IfM Bonn estimates around 186,000 businesses ready for handover between 2026 and 2030 (IfM Bonn).
• Families take over less and less often. Selling to outsiders is becoming more important (Flossbach von Storch).

Reason 1: Owners are getting older

The main driver is demographics. According to KfW, 57 percent of SME owners are now 55 or older. Twenty years ago, it was only 20 percent (KfW). Owners who want to hand over within the next two years are on average already over 66, and a quarter will be older than 70 when they step back.

Many of these owners founded or took over their businesses in the 1980s and 1990s. That generation is now reaching retirement age all at once. This is the heart of the succession wave.

Reason 2: Families take over less often

Handing over within the family used to be the norm. According to a meta-analysis by IfM Bonn, just over half of family businesses were passed on within the family, about 17 percent to employees and 29 percent to outsiders. Over the last 15 years, family succession has become slightly less common (IfM Bonn).

A recent study by the Flossbach von Storch Research Institute from September 2026 describes the same trend: more and more family businesses cannot find a successor within the family, and selling is becoming more important (Flossbach von Storch). Children today often have careers of their own and do not want to take over. That is no criticism, but it changes the market.

Reason 3: Red tape and the economy

According to KfW, red tape has become a much more important reason for planned closures (KfW). Many owners ask themselves whether a handover is still worth the effort. The weak economy adds to this: IfM Bonn points out that a poorer economic outlook makes some takeovers less attractive to potential buyers (IfM Bonn).

How big is the wave really?

It is worth looking closely, because the figures sound very different depending on the source. There are no official statistics on business succession in Germany. KfW and IfM Bonn use different methods:

• KfW (survey of more than 13,000 businesses): around 109,000 planned successions a year through the end of 2029, or well over half a million in five years. It counts everyone who plans a succession.
• IfM Bonn (estimate based on official data): around 186,000 handovers from 2026 to 2030, or about 37,200 a year. It only counts businesses that are economically worth taking over (IfM Bonn, June 2026).

The two figures must not be added together. One detail stands out: IfM Bonn even expects slightly fewer handovers a year than in the 2022 to 2026 period (IfM Bonn, June 2026). So the wave is not automatically growing, but it remains high. And the number of planned closures shows how many businesses could be lost without a successor.

Which businesses are affected?

According to IfM Bonn, most handovers involve business services and manufacturing. The largest group are businesses with annual revenue of 500,000 to 1 million euros (IfM Bonn). So this is mainly about small, owner-managed businesses, not large corporations. Relative to the number of businesses, Lower Saxony has the most handovers ahead. Read more in our article on businesses with 5 to 100 employees and in the overview by German state.

What this means for successors

If you want to found a company, the succession wave is a rare opportunity. Many healthy businesses with loyal customers, an experienced team and steady revenue are looking for someone to carry on. If you take over, you start with customers, a team and cash flow from day one. The successor test helps you find out whether this path suits you.

What this means for owners

If you want to hand over, start early. A good succession usually takes several years: the business has to be set up so it runs without you, and the right person has to be found and brought in. The succession check helps you see where you stand.

Conclusion

The succession wave is real, but it is not a flood that sweeps everything away. It is a long generational change, driven by the age of owners and by families taking over less often. Whether it leads to closures or new beginnings depends on whether enough people are ready to carry on what others have built.