Succession planning in the SME sector

Business succession is increasingly turning into a key challenge for SMEs' competitiveness. Some 620,000 small and medium-sized entrepreneurs plan to transfer or sell their business by the year 2018. However, a fundamental demographic bottleneck is emerging. There are not enough potential successors for the growing numbers of older entrepreneurs. Besides, many entrepreneurs wait very long before they think about their succession. One in three business owners who plan to retire within three years still has no concrete plans.

Ageing boosts SMEs’ need for successors – 620,000 business transitions by 2018(PDF, 92 KB, non-accessible)

One in three start-up entrepreneurs takes over or acquires an active participation in an existing business. As entrepreneurs are not immune to demographic change either, increasing numbers of SMEs are ready to change ownership. Takeover entrepreneurs therefore play an important role in preserving the Mittelstand, the backbone of the German economy. Most business transfers are still based on family succession. Here, more and more daughters appear to the taking over their fathers' companies. The share of female takeover entrepreneurs has more than doubled in the past years.

Transfer-planning entrepreneurs outnumber takeover entrepreneurs 3 to 1(PDF, 95 KB, non-accessible)