KfW: Plans to close businesses rise among German SMEs, price expectations up
A study by KfW Research indicates an increase in plans by German small and medium-sized enterprises (SMEs) to cease operations without finding a successor. Concurrently, price expectations for business sales have significantly risen since 2019.
Frankfurt – The trend of German small and medium-sized enterprises (SMEs) planning to cease operations without securing a successor is growing, according to the "Nachfolge-Monitoring Mittelstand 2025" report by KfW Research. One-quarter of these businesses are considering a conscious closure without a succession plan as the senior generation retires, affecting an estimated 114,000 companies annually until the end of 2029.
The primary driver for these closure plans remains retirement due to age. However, the report also notes an increasing relevance of bureaucratic hurdles as a factor influencing these decisions. Despite this, a substantial number of SMEs continue to actively seek succession. Approximately 109,000 SMEs aim to arrange for a successor by the end of 2029.
The study also highlights changes in financial expectations. Since 2019, the average price expectations for business sales among SMEs have increased markedly. Overall, the average expected sale price for the SME sector has risen by around 34 percent in nominal terms. After adjusting for inflation, this represents an increase of approximately 9.5 percent.
These findings underscore the challenges facing Germany's business landscape concerning generational transitions. The combination of higher price expectations and a growing inclination to close businesses could have significant implications for business continuity and the broader economic structure.