Business succession in Germany: how it works and why it needs founders

Business succession is the planned transfer of ownership, management or both to a new person or a new structure. For many family businesses it is the most important strategic decision of a generation. And often the most personal one.

In short

• There are four basic routes: handover within the family, non-family management, sale, and a foundation or holding.
• By the end of 2029, around 545,000 German Mittelstand companies want to settle their succession. Around 569,000 plan to close (KfW Research).
• Over the past ten years, women made up between 21 and 23 percent of successors, most recently 21 percent (wir Magazin).
• Succession rarely fails for lack of people. It fails for lack of process.

Why it is urgent

The German Mittelstand is getting older. 57 percent of owners of small and mid-sized companies are 55 or older. According to KfW Research, for the first time more companies plan to close by the end of 2029 than to hand over.

wir, the German magazine for business families, points to the DIHK succession report 2025: the number of owners planning to close hit a record in 2024, and for 92 percent of them the reason is a missing successor. Estimates put the number of family business handovers at around 30,000 a year, with roughly 480,000 employees in total.

Behind each of these numbers is a company with customers, a team and knowledge built over decades. If it closes, all of that is gone.

The four routes to succession

Which route fits depends on the family, the company and the people available. These are the four basic forms:

• Within the family: a daughter, son or other relative takes over ownership and management. The classic route, but no longer the default.
• Non-family management: the family keeps ownership, an external person runs the company. Useful when ownership should stay in the family but nobody wants to manage it.
• Sale: the company goes to a new owner. That can be the existing management or an outside buyer who takes over and runs it.
• Foundation or holding: the company moves into a family foundation or holding, keeping it together for the long term regardless of individual heirs.

What makes a handover work

The executive search firm Egon Zehnder writes in wir Magazin: succession does not fail because of missing candidates, it fails because of missing processes that build trust and cultural fit. That matches what we hear in our conversations.

• Start early. Searching, getting to know each other and onboarding take time. Planning early gives you options.
• Talk openly about expectations. What should stay? What may change? How long does the current owner stay involved?
• Prepare the numbers properly. Accounts, contracts, dependence on single customers. It builds trust on both sides.
• Bring the team along. When the staff learns about it is a decision in its own right.
• Involve experts. Tax, law and financing belong in experienced hands.

Women in succession

Over the past ten years, women accounted for between 21 and 23 percent of successors in Germany. Most recently the share dipped slightly to 21 percent, as reported by wir Magazin.

At the same time, more women take over today than in earlier generations, and they shape the role differently. For the Mittelstand this is an opportunity it still uses too little. Every woman who takes over widens the circle of people who can keep companies going.

Taking over is founding

When nobody in the family wants to continue, selling to an outside person is often the route that keeps the company alive. This is where we see the biggest gap. Many people want to work as entrepreneurs: founders, ex-founders, executives. Most of them start from zero.

If you take over, you start with customers, a team and cash flow. The work is different from a startup, but it is entrepreneurial. The best startup is sometimes already 40 years old.

What Nachfounder does

Nachfounder is a programme like an accelerator, only for companies that already exist. We prepare successors for the takeover, match them with the right companies and guide the process in stages. Not M&A advisory. We turn successors into founders.

Thinking about your succession, or want to take over? Get in touch and we will reply personally.