KfW Research: More and more SMEs want to close down once the owner retires

• 57 per cent of SME business owners are 55 years old or older
• Until 2029, 114,000 SMEs could be closed down annually
• Expectations around the sale price of a business have increased noticeably; on average, EUR 499,000 is expected

One in four SMEs in Germany are considering closing down when the senior generation retires in the near or more distant future. Among just those owners planning to retire by the end of 2029, 569,000 do not aspire to keep their business afloat. That means around 114,000 business closures each year. At the same time, 545,000 SMEs want to find a successor by the end of 2029 – a good 109,000 businesses per year. So, for the first time, there is a slim majority of businesses planning to shut down.

These are some of the findings of a recent special analysis conducted as part of the representative KfW SME Panel between mid-February and mid-June 2025. More than 13,000 SMEs took part in the survey for the panel.

The main reason business owners gave for wanting to close down was their age. In 2025, 57 per cent of SME business owners were 55 years old or older, three percentage points more than in the previous year. Twenty years ago, it was just 20 per cent. Many business owners find it very difficult to find a suitable successor.

Of the respondents planning to shut down, 47 per cent explained that no one in the family, for example children, had an interest in taking over. Too much bureaucracy was mentioned as a reason for closure by 42 per cent of respondents – 12 percentage points more than in the previous year, and more than ever before. In a succession, many legal aspects need to be clarified, but tax, information and reporting obligations must also be complied with.

“Germany’s economy is struggling to maintain its international competitiveness. SMEs are known to be the backbone of the German economy. It is crucial that we secure the survival of as many SMEs as possible. We therefore need a consistently stronger entrepreneurial drive in Germany. Reducing bureaucracy is one step that can help more businesses get started,”

said Dr Dirk Schumacher, Chief Economist of KfW.

“It has been demonstrated that business owners who have found a successor invest more strongly in their business again. Resolving the issue of succession is therefore also decisive for kickstarting investment in the SME sector.”

One difficult step on the path to a successful business transition is reaching agreement on a sale price acceptable to all parties. KfW Research has surveyed the sale price expectations of SME business owners again for the first time since 2019. They have increased noticeably since 2019. Owners seeking to complete succession arrangements within the next five years want an average of EUR 499,000. Six years ago, it was just EUR 372,000. The higher sale price sought is thus well above the inflation rate over this period and is 9.5 per cent higher on a price-adjusted basis. On average, succession planners aspire to obtain a sale price that is 1.2 times their annual turnover.

Six years ago, only 18 per cent of SMEs wanted to achieve a sale price of more than EUR 1 million, now it is 27 per cent. By contrast, only five per cent of business owners would settle for less than EUR 50,000, whereas in 2019 it was still 18 per cent. Owners expect to sell their business for a median of EUR 375,000, which means that half of them want more, and half would settle for less. In 2019 it was just EUR 175,000.

The findings of the Status report on SME succession can be retrieved from www.kfw.de/fokus

KfW supports SMEs with a number of promotional programmes on behalf of the Federal Government. More information is available at We are strengthening the SME sector (German page).