The number that flipped
Germany's KfW succession monitor asks the same question in the same panel every year. For the period to the end of 2029 two figures now sit side by side: 545,000 firms intending a handover, roughly 109,000 a year, and 569,000 firms whose owners want to exit without continuation, roughly 114,000 a year.
That order is new. Until now, succession plans led.
Ageing explains the volume but not the shift. 57 per cent of German SME owners are 55 or older, more than two million people, against 20 per cent twenty years ago. Owners planning a short-term handover by the end of 2026 average 66.5 years. This has been visible for decades and it pushes handovers and closures alike.
More telling is what the closure planners give as their reason. Retirement age: 52 per cent. No interest within the family: 47 per cent. Too much bureaucracy: 42 per cent, up from 30 the year before. No other factor gained anything like that.
The estimate stagnates while owners keep ageing
The IfM Bonn counts differently, and the difference is the heart of the matter. KfW asks owners about their plans, so the supply side. The IfM treats a business transfer as a market outcome and therefore looks at both sides: how many firms are ready to hand over, and for how many a takeover is economically worth it at all.
For 2026 to 2030 the institute arrives at around 186,000 firms, some 37,000 a year. That is roughly 4,000 fewer than in the previous period. The reason is stated plainly in the summary: for some firms earnings have deteriorated to the point where a takeover no longer pays from the successor's perspective. Business services with annual revenue under 500,000 euros are named as the main group.
So 109,000 and 37,000 do not contradict each other despite the gap. They measure different things, and anyone quoting both owes the reader that distinction.
The DIHK measures a third quantity: who actually shows up for advice. 9,636 senior owners faced 4,016 interested successors in 2024, a ratio of 2.4 to 1 and the highest reading since the series began in 2007. The gap has almost doubled since 2019. Notably, only 12 per cent of the owners cite business reasons for handing over. The large majority of these firms are not in economic distress.
What makes a business worth taking over
Here the question turns concrete, and the price data give an uncomfortable answer.
The average asking price is 499,000 euros, the median 375,000. Since 2019 price expectations have risen 34 per cent nominally and 9.5 per cent after inflation. On average, succession planners aim for 1.2 times annual revenue, with a median of 0.6.
Comparison with completed transactions shows what this hangs on. FINANCE revenue multiples in the micro-cap segment run from 0.25 to 0.50 for construction and trades up to 1.33 to 2.30 for software and IT services. That is a factor of five between two sectors on the same measure.
The difference comes down to something other than the sector label: how much of the value sits with the owner as a person, and how much sits in the business itself. In recurring revenue, in documented processes, in systems that keep working once the owner has retired.
A trade business whose orders arrive through the owner's relationships, and whose knowledge lives in the owner's head, is hard to take over. The reason is not that trades are worth less. The buyer here is buying precisely what walks out with the seller.
What that means for the ten years before a handover
Most writing on the topic treats succession as an event: valuation, buyer search, contract, handover. The data suggest otherwise. Whether a business is worth taking over is settled years earlier, on questions that look like operations and not like a sale.
Three of them are measurable long before anyone thinks about a successor.
How much revenue returns without anyone selling again. Recurring revenue is why software earns higher multiples. It is no software privilege, though: maintenance contracts, framework agreements and service agreements do the same work.
How much of the business runs without the owner. The test is uncomfortably simple. Four weeks away with no questions. Anyone who cannot manage that is selling a job, not a company.
How much knowledge is written down. Not in the manual nobody reads. In the place where the work happens. This is where digitalisation stops being an end in itself and starts showing up in the price.
These three cost time and little money. They are why two businesses with identical profit get valued a factor of five apart.
The uncomfortable conclusion
The succession gap is usually framed as a demographic problem, and framed that way it cannot be solved. Nobody can bring the baby-boom cohorts back.
Framed as a question of being worth taking over, it can be solved, by the owners themselves, in the years they are still working. The IfM says as much in its reason for the stagnation: the bottleneck now sits less with those handing over than with the question of whether the takeover adds up.
Anyone planning to hand over in ten years is working on it today. Not on the sales brochure. On making the business run without them.