When businesses are transferred in Germany, in the majority of cases (67 percent) this occurs without the payment of a purchase price. These are therefore transfers within the family; the transfer has quite clearly taken place as a gift under inheritance law. Conversely, in 33 percent of cases, money changed hands. According to a study by the KfW Startup Monitor, the purchase price exceeded 50,000 euros in six percent of the transfers. In 10 percent of cases, the buyer paid a sum between 10,000 and 50,000 euros; in 17 percent of cases, the purchase price was less than 10,000 euros. The study is based on data from 2014 and 2015.
What the buyers have in common is that they are acquisition entrepreneurs. A characteristic of acquisition entrepreneurs is that they tend to start businesses through full acquisition. In times of economic uncertainty, full-acquisition
founders to be more willing to pursue acquisitions. For example, the proportion of acquisition-based founders in full-acquisition startups was above average in the years following the bursting of the dot-com bubble (2001–2004) and during the financial crisis (2009–2012).
The authors also examined how acquisition-based founders differ from new founders. In short: not much. There are, however, some differences. For example, women have increasingly emerged as acquisition-based founders in recent years; apparently, they have discovered this as an opportunity for self-employment. Their share among acquisition-
has risen steadily from its low point in 2012 (20 percent) to over half (52 percent) in 2015. The authors note, however, that this may also be related to the fact that patriarchal family
businesses are now increasingly taking their daughters into account.
In which industries do new founders and take-over founders invest? The overlap is very large. There are only two sectors where their investment patterns diverge significantly: take-over founders are less likely to invest in service
service companies, but invest more heavily in retail firms.
Encouraging news from the perspective of successors: The number of companies
is growing steadily. Over the past three years, the share of small and medium-sized enterprises facing succession in the near term has risen steadily from 14 to 17 percent, and their number has increased from 530,000 to 620,000. This increase is primarily linked to demographic trends: Between 2002 and 2014, the proportion of owners of small or medium-sized enterprises aged 55 and older rose from 20 to 35 percent.
As the study by KfW Research and Creditreform has shown, many SMEs are lagging behind the ideal succession process. Only 42 percent of SMEs scheduled to undergo a handover in the next three years have the succession process underway. Twenty-two percent report that they are actively planning their succession. The problem group comprises 36 percent of companies; of these, 25 percent have so far only gathered information, and 11 percent of owners have not even given the topic any thought yet.
In this context, many SMEs overlook the fact that a succession
process should be prepared for carefully and well in advance. The German Chamber of Industry and Commerce (DIHK) recommends beginning concrete planning and the search for a successor no later than three years before the handover.
This applies both to a handover to a family member and in the case of a sale. 58 percent of SMEs have decided on a specific handover
option: 29 percent definitely want to hand the company over to a family member, while 18 percent want to sell to an outside party, and 12 percent want to hand it over exclusively to employees or co-owners. In contrast, 43 percent of small and medium-sized business owners do not yet want to commit to a specific option; they are keeping all options open.
