FRANKFURT, Jan. 10 (Xinhua) -- Approximately 231,000 owners of small- and medium-sized companies (SMEs) in Germany are considering closing their businesses by the end of 2025 mainly because retiring owners face challenges in finding successors, said the state development bank KfW on Friday.
This represents an increase of more than 41 percent from last year, and it is also the highest number since KfW began its succession monitoring research in 2015. Within three to five years, the number of entrepreneurs facing this uncertainty is expected to increase to 310,000, according to an analysis report of KfW.
The study attributes this problem to the fact that the population of SME owners is aging at a faster rate than the overall population in Germany, with 39 percent of entrepreneurs aged 60 or older, compared to just 30 percent of the overall population.
The study found that 215,000 business owners who have short-term succession plans in place until the end of 2025 have an average age of 65.4 years. However, many have yet to begin the search for a successor who can take over their business or are still in the very early stages of the process.
"The business succession problem is expected to get worse in the SME sector," said Michael Schwartz, SME expert at KfW Research.
Schwartz stressed the importance of a stronger entrepreneurial drive in Germany, saying that "entrepreneurship or a career in SME management should be a clear alternative to salaried employment."
