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Lack of entrepreneurs makes company succession more difficult

February 11, 2019


Abstract : Approximately 227,000 small or medium-sized companies want to transfer ownership to new hands by the end of next year (in 2017 the figure was 236,000).

New owner sought: Approximately 227,000 small or medium-sized companies want to transfer ownership to new hands by the end of next year (in 2017 the figure was 236,000). This is the result of a special evaluation in 2018 by the SME panel of the KfW development bank. Most companies rely on family members or external solutions. "The central bottleneck for finding external successors, however, is the limited numbers in the new generation of entrepreneurs who would take over," explained JörgZeuner, chief economist at the state development bank.

In particular, the number of entrepreneurs willing to take over a company has declined; the latest figure is 57,500 per year. "These are far too few to cover the high demand for company successors in the coming years," Zeuner said.

According to the data, there has been a growing awareness among business leaders of the need to set the course for a change of generation at an early stage. For 36,000 owners, however, time is slowly running out. So far, they have only gathered information. However, an orderly handover usually requires several years of planning, especially if the successor is not a member of the family.

However, almost two thirds (141,000), have already finalized the planned succession for the end of 2020 or are negotiating with the successor (2017: 137,000). Other bosses have concrete plans.

dpa

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