Anyone who wants to hand over their business must first make it ready for the transition. The bad news: If done carefully, this process takes years. The good news: This same process makes a business ready for the future.
There is one question that haunts owner-managed companies for years before it becomes urgent: Who will lead this company in five or ten years? Most solutions that address this question start at the end of the process. They cover business valuation, corporate law, estate taxes, and what a purchase agreement looks like. That’s important. But often, the decision on whether a handover will take place is made at a different stage.
Why Succession Plans Fail in Practice
Every year, the German Association of Chambers of Industry and Commerce (DIHK) analyzes the consulting cases handled by the 79 Chambers of Industry and Commerce. For 2024, this amounted to over 50,000 in-person contacts and 9,636 companies that were actively seeking a successor. The findings of the DIHK report “Business Succession 2025” clearly illustrate what this is really all about.
38 percent of sellers are not yet ready at the time of the consultation. 36 percent have an asking price that the market cannot support. And 28 percent find it difficult to let go.
None of these three points is a legal issue. The first concerns the company and its processes, the second involves one’s own assessment, and the third is a personal matter for which there is simply no established framework in traditional consulting. All three can be addressed years in advance. That is when they must be resolved.
Added to this is the market situation. In 2024, there were 9,636 companies looking to be acquired, compared with only 4,016 people interested in taking over a business. This means there are roughly two and a half companies for every person interested in a takeover. As a result, 27 percent of the companies that received consulting services were considering closing down.
For Saxony, a 2023 report by the Ministry of Economic Affairs identifies approximately 1,500 businesses that are expected to be up for succession each year through 2030. The state consolidates its resources on this topic on the “Business Succession in Saxony” webpage. Those seeking a nationwide overview can find it at the IfM Bonn, which estimates the number of companies ready for transfer between 2026 and 2030.
Only for one-fifth of them is it due to business reasons
KfW also surveyed companies planning to shut down. The responses from the SME Succession Monitoring Survey significantly alter the picture.
52 percent cite retirement age, 47 percent cite a lack of interest within the family, and 42 percent cite bureaucracy, taxes, and legal issues. Only 21 percent say that business conditions do not allow for a sale. 17 percent have not found a buyer, and 11 percent felt that the search was too time-consuming.
In other words: In about one-fifth of cases, the company itself is the obstacle. In nearly half of the cases, the family simply lacks interest; in just over a quarter, the search is unsuccessful or never even begins. Many of these companies could be handed over. It’s just that no one gets started in time.
What conditions must be met for a successful handover?
A company must be ready for the handover. But what exactly does that mean?
- We need decision-makers within the organization who are allowed to make their own decisions—and who actually do so. In many owner-managed companies, there are formally designated division heads, but in reality, all major decisions still go through a single person. Changing that takes years because it requires trust, a certain tolerance for mistakes, and a willingness to relinquish control.
- We need numbers that someone from outside can read and understand. Bookkeeping that satisfies the tax advisor isn’t enough. Successors and their banks want to know which customers are generating revenue and what actually drives the bottom line.
- We need processes that are documented and efficiently structured. Knowledge that exists only in a person’s mind cannot be passed on during a handover; instead, it is lost. At the same time, the processes should meet current standards for digitization and automation.
- The most important customers must be loyal to the company. If they stay out of a personal connection to the owner, they’re selling a customer base that could be lost if the business changes hands. Buyers and banks know this and factor it in.
Because these companies have grown organically over decades, they usually need to undergo a restructuring first.
Transition and transformation can go hand in hand
And this is where the real opportunity lies in a long-term transition.
Bringing new people on board adds skills that are currently lacking in the workforce: expertise in automation and AI-supported processes, the ability to work with data, new ways to reach customers, and the knowledge of how to address sustainability requirements that are now coming into the company through supply chains and RFPs.
Often, these people start out as temporary reinforcements and gradually grow into the role over the years. For many companies, this is the most realistic approach because it accomplishes two goals with the same effort and avoids forcing a decision before both sides have had a chance to get to know each other.
But anyone who wants to manage this process successfully must start early. According to KfW, those seeking a short-term succession are, on average, already 66.5 years old. Those who tackle succession planning this late are essentially offering the company as it stands today, regardless of its financial health. Those who begin in their mid-fifties have eight years to turn it into a business that someone will want to take over.
The shift behind this is significant. In 2025, 57 percent of small and medium-sized business owners were 55 or older. Twenty years ago, that figure was 20 percent. Over the same period, the average age has risen from 45 to just over 54. For many companies, therefore, now is the right time.
The Other Side of the Table
For people who want to work as entrepreneurs, this same situation presents an opportunity that is rarely discussed.
A ratio of two and a half companies looking to acquire a business to one person interested in being acquired describes a market in which demand drives the selection process. Whoever acquires a business starts with an established customer base, team, and revenue stream, rather than spending three years building them up and hoping for the best.
The first step is rarely an immediate purchase. More often, it involves someone joining the company to fill a skills gap, taking on responsibility for a specific area, and gradually acquiring an ownership stake. It is striking how unevenly interest is distributed: Only just under 25 percent of those who want to take over a business are women, while they account for over 40 percent of those seeking startup consulting.
What has been holding this path back so far is, above all, a certain narrative. A takeover sounds like managing something that someone else has built. In practice, however, there is often more room to maneuver than when starting a company from scratch, because a solid foundation supports experimentation.
Those looking for specific opportunities can find listings on the nationwide business succession exchange nexxt-change and through the advisory services of the Leipzig Chamber of Industry and Commerce.
What can be preserved in the process
Every company that is sold retains its jobs, its expertise, its supplier relationships, and its importance to the region. All of this has been built up over decades. It would take years to build something comparable elsewhere.
There is also a second point to consider. A leadership change is one of the few moments when a fundamental shift can truly take place in an established company—in its business model, its leadership style, and its approach to managing resources. During day-to-day operations, the scope for change is limited. During a transition, it is significant.
Anyone who wants to embed sustainability in Saxony’s small and medium-sized businesses should therefore start with succession planning.
Event Series at Impact Hub Leipzig
Based on these considerations, a three-part event series has been developed, which takes place at Impact Hub Leipzig and is supported by the Saxony Entrepreneurs’ Association. It is aimed at business owners and successors—both from within the family and from outside. The focus is deliberately not on legal and tax issues, but on the business itself and the people who run it.
On September 23, the focus will be on how to inspire young people to embrace entrepreneurial responsibility. In a “Tandem Dialogue,” entrepreneurs and the next generation will discuss motivation, obstacles, and models for participation.
On October 28, the focus will be on our own role. What responsibilities do I retain, which ones do I delegate, and how do I transition from day-to-day management to a role in which I continue to make an impact without having to do everything myself? Florian Börner will offer his own perspective on this topic that evening.
On November 25, the focus will be on the company itself: transparent financials, clear lines of responsibility, and leadership that someone else can build upon.
All three evenings will take place at Impact Hub Leipzig, located at Naumburger Straße 25. The series is designed as a small group so that participants can speak openly and confidentially. The evenings can be booked individually or as a package.