KfW: Quarter of German SMEs Consider Business Closure
According to KfW Research, one in four German small and medium-sized enterprises (SMEs) are considering ceasing operations. Owner retirement is the primary reason cited for potential closures.
Frankfurt – A significant 231,000 German SMEs are contemplating business closure by the end of 2025, a record high since KfW Research began its successor monitoring. The primary driver for these planned closures is the impending retirement of business owners.
In contrast, approximately 215,000 companies are seeking successors for their businesses within the same period. However, only slightly more than half of these are expected to have a high probability of successful transitions.
The average age of current business owners has reached a new peak, exceeding 54 years. This aging demographic exacerbates the existing scarcity of business succession opportunities.
KfW Research concludes that a sustainably higher rate of new business formation in Germany is necessary to counterbalance these trends. The findings are based on a survey conducted in November 2024 involving 4,500 SMEs.