German SMEs face critical leadership succession challenges

Thousands of medium-sized enterprises in Germany face a critical strategic challenge regarding leadership succession. According to the Risiko-Report Mittelstand 2026, 54.7 percent of surveyed entrepreneurs view dependency on a single owner as a high risk, while 31.1 percent consider unresolved succession as a threat to their company's future.

Data from the KfW Succession Monitoring Mittelstand 2025 indicates that approximately 109,000 medium-sized companies will seek succession arrangements annually through 2029. However, one in four companies is considering a deliberate business closure once the current generation of owners retires.

Finding suitable successors is difficult because the process requires more than just technical skills; it demands entrepreneurial understanding, financing, and deep trust. Many owners fail to address succession planning early enough, often only seeking solutions as retirement approaches through business exchanges or consultants.