Succession in the Trades: Why Thousands of Businesses Can't Find a Successor

A Problem Affecting Hundreds of Thousands

The numbers are clear — and they are large. According to the KfW SME Panel 2025, around 545,000 small and medium-sized businesses in Germany are seeking a successor by the end of 2029. That's roughly 109,000 businesses per year looking for a new owner. By the end of 2026 alone, approximately 186,000 owners are planning their exit. That represents around five percent of all SMEs in Germany.

The succession question is not a niche issue affecting a handful of industries — it is a central challenge for the entire Mittelstand. And the trades and crafts sector is right at the heart of it.

The Problem Isn't a Lack of Demand — It's a Lack of Visibility

At first glance, the situation looks dramatic: according to IHK advisors, the imbalance between owners looking to hand over their businesses and potential successors has nearly doubled since 2019. 72 percent of owners who want to step down do so for age-related reasons. At the same time, the number of people in the typical age range for starting or acquiring a business is declining.

But does that really mean there aren't enough buyers? Or is it that many potential successors simply don't know this option exists? Acquiring an existing business is still vastly underappreciated as a path to self-employment. When people think about starting a business, they think of garages and the startup scene — not the well-run HVAC company next door that's looking for a successor. Yet this type of acquisition offers enormous advantages: a running business, established customer relationships, a well-coordinated team, and immediate revenue.

On top of that, many owners search for their successor exclusively within their immediate circle — within the family, among employees, or through their tax advisor. Those who can't find a successor in their direct network quickly feel they're facing an insurmountable problem. But there are buyers out there — just not necessarily in the same postcode area. Expanding the search radius, for example through digital platforms and succession marketplaces, can make all the difference.

Closure Instead of Succession: A New Trend

A particularly alarming development has been documented by KfW in its latest survey from January 2026: for the first time, more businesses are planning to close than to hand over to a successor.

The figures for the Mittelstand as a whole: 30 percent of owners are actively pursuing a succession — six percentage points more than in 2024, which is in itself a positive signal. But 25 percent are already definitively planning to shut down their business. A further 3 percent are seriously considering closure. Taken together, 28 percent are thinking about winding down, while only 30 percent are actively pursuing succession. 42 percent have no concrete exit plans yet.

In the trades, the KfW figures look somewhat better than for the Mittelstand overall — mainly because trade business owners tend to be younger and start planning earlier. But the underlying trend is the same: the option of "just closing the business" is being considered by more and more owners as a realistic scenario.

The Trades: Unique Challenges — and Unique Opportunities

The trades and crafts sector has certain characteristics that set succession apart from other industries. Understanding these makes it possible to address them effectively — and this is precisely where professional guidance makes the difference.

Trade businesses are often closely tied to the owner as a person. The master craftsman is not just the managing director but also the most important specialist in the business, the personal point of contact for long-standing customers, and the trainer for apprentices. This makes a well-planned transition phase particularly important — along with a structured business profile that makes these "soft" qualities visible to potential buyers.

In many trades, taking over a business requires a master craftsman certificate (Meisterbrief). This limits the pool of potential successors. But it also means there is less competition among bidders. A qualified master craftsman who acquires an existing business often finds better conditions than someone who has to compete in a more open market. For sellers, this means it's worth extending the search beyond their own region — the right master craftsman may be looking in a different city.

Many trade businesses have limited scalability — capacity depends on the available skilled workforce. This is not a disadvantage but rather the reality of a stable, proven business model. For valuation purposes, however, it means that asking price expectations need to be grounded in reality. And this is precisely one of the areas where a well-founded business valuation provides early clarity.

The Asking Price Question

Speaking of asking prices: KfW has surveyed owners' price expectations for the first time since 2019. In the trades, the average target selling price is €453,000, with a median of €375,000. On average, this corresponds to 87 percent of annual revenue — significantly less than in the overall Mittelstand.

Also notable: asking price expectations in the trades have risen by only 16 percent since 2019, compared to 34 percent in the Mittelstand overall.

At the same time, IHK advisors report that inflated price expectations remain one of the most common obstacles to successful succession. The emotional attachment to one's own business leads many owners to a valuation that the market simply doesn't support. An early, well-founded business valuation can help calibrate expectations and accelerate the negotiation process. At the end of the day, a successful sale is better than no sale at all.

What Needs to Change?

The causes of the succession crisis are varied — and not all of them can be resolved in the short term. Demographic change is a reality. But there are levers that can be pulled.

Early planning is the most important factor. Experts recommend starting preparations three to five years before the planned handover. In practice, many owners only begin a year before they want to exit — and then discover that finding a suitable successor takes time.

Transparency builds trust. One of the most common reasons succession negotiations fail is a lack of transparency about the business's financial health. Buyers want to see reliable figures. Sellers who present their finances openly and in a structured way find a suitable partner faster — and typically achieve better terms.

Expanding the search radius. As described in the previous section, many successions fail not because of a shortage of buyers, but because sellers and buyers can't find each other. Digital platforms make the succession market more accessible — for both sides.

Succession Is Also an Opportunity

Despite all the dramatic figures, it's important not to lose sight of one thing: behind every business seeking a successor, there is also an opportunity — for the seller, who can pass on their life's work into good hands, and for the buyer, who takes over a running business with an existing customer base, an established team, and immediate revenue.

The succession question is not an abstract statistic. It affects real people, real businesses, and real jobs. And it can be solved — when both sides have clarity early on and are professionally supported.

The First Step: Knowing Where You Stand

Whether you're thinking about selling in one year or in five — the most important first step is knowing what your business is worth. Not as a rough gut feeling, but as a well-founded figure based on your actual financial data.

Sequi's free valuation tool calculates your business's value using the SDEBIT method — with industry-specific multiples and an individual risk analysis. A few minutes for a well-founded initial assessment that gives you clarity.

→ Get your free valuation at sequi.market