Succession & business transfer

Auf dem Bild ist ein älterer Mann mit Brille zu sehen, hinter ihm stehen eine junge Frau und ein junger Mann, alle in Businesskleidung.

Generational change in the SME sector

In Bavaria alone, almost 36,000 companies with over 600,000 employees will be facing a generational change between 2022 and 2026. This figure has risen significantly compared to previous years, as many company owners are now also entering this phase of their lives and companies. These are mostly smaller and larger owner-managed or family-run SMEs, which are the mainstay of our economy, especially in Bavaria. All sectors are affected, from craft businesses to manufacturing and service providers. In this respect, this topic is of great economic importance.

More and more entrepreneurs in Germany are unable to find a suitable successor. This is the conclusion reached by the German Chamber of Industry and Commerce (DIHK) in its latest Business Succession Report 2024, which is based on more than 48,000 consultations at the Chambers of Industry and Commerce (IHKs). According to the survey, 28% of senior managers are currently considering closing the doors for good due to the failing generational change. Last year, the figure was 25 percent. Extrapolated, this means that more than a quarter of a million companies in Germany will be on the brink of closure in the next five years.

Every company that leaves the market is a great loss for Germany, for Bavaria and also for the city of Hof. In the 2024 business survey conducted by the city of Hof, numerous companies cited this problem.

Complex questions

A company succession or business transfer is extremely complex. There are numerous initiatives by the Chambers of Industry and Commerce, the Chambers of Crafts and also the Bavarian Ministry of Economic Affairs that provide assistance in this area. The main reason given for problems with business succession is that there is no successor in sight. More and more owners are reaching retirement age, but there are fewer and fewer people between the ages of 18 and 40 who are actively starting a business. There are successful examples of business handovers in Hof, but unfortunately there are also business closures.

This complex process also involves emotions, as it is often the entrepreneur's life's work that is being handed over. It is about "introducing" the next generation to the management of the business, tax aspects and financing. A company is often sold if no succession from within the family is possible. How can a buyer be found? Will he continue to run the business as it is? How can the takeover be managed fiscally and financially? Can a purchase price be agreed that is satisfactory for both parties? Does the buyer come from the company's own management team or is he completely external?

There is also the fundamental question of whether the current business model has a future and is "set up" for success - especially against the backdrop of difficult economic conditions. Many areas need to be clarified. Banks, tax consultants and chambers of commerce are available for this purpose.