Executive search for Business Succession
There are over 3.4 million small and medium-sized enterprises (SMEs) in Germany, accounting for more than 99% of all companies. These form the backbone of the economy, as they employ over half of all employees subject to social insurance contributions (around 17-19 million people) and over 70% of all trainees.
According to KfW’s succession monitoring, more and more entrepreneurs in Germany are now considering closing their businesses due to a lack of succession solutions. By the end of 2025, around 231,000 small and medium-sized enterprises are planning to shut down. That is 67,500 more than a year ago and has far-reaching negative consequences for Germany as a business location.
Around 200,000 of these companies are due to be handed over to a successor in the next five years, but there are three times more companies than interested parties. The retail, manufacturing, and service sectors are particularly affected.
The DIHK report from 2024 therefore predicts that more than a quarter of a million businesses will close, with three-quarters of the reasons being age-related. Overall, more than 300,000 companies are at risk of closure in the coming years if this trend continues. The consequences would not only be economic losses, but also a potentially large number of jobs at risk.
The reasons for the failure of a business succession are usually a lack of interest on the part of the heirs, insufficient demand from suitable buyers, or a lack of financing.
With over 200,000 SMEs coming onto the market as part of a succession process and only 33% having any chance of finding a buyer, owners need to explore new avenues.
Transferring ownership to one or more employees is particularly interesting. However, this often fails because an employee cannot afford the purchase price. One possible solution is an earn-out model, in which the buyer or buyers pay the purchase price over several years, using the company’s profits and accompanying loans.
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What should you do if there are no interested or qualified employees in your company?
One way, as with the recruitment of executives, is to hire a personnel consultant.
The prerequisite for success is the selection of a highly qualified personnel consultant with industry expertise who can use direct contact to find suitable candidates who are interested in not only taking over the company as managing directors, but also becoming owners.
Why would an experienced manager be willing to buy a company?
The probability is greater than assumed. This is because there are many managers who are frustrated with corporate structures and long for more personal responsibility and creative freedom. This group of managers has often been toying with the idea of starting their own business for some time, but usually fails to come up with ideas for suitable products. This type of person is ideally suited for business succession.
This target group—entrepreneurial managers with strong implementation skills – can be approached by a headhunter with an industry network using targeted direct search. Experienced recruitment consultants know the company and its opportunities and risks very well and can present these transparently to potential successor candidates. At the same time, recruitment consultants can use qualified interviews and diagnostics to assess whether candidates have the cognitive abilities required for this demanding role and whether their skills are a good fit. Diagnostics can also be used to assess whether candidates have an entrepreneurial mindset.
In many respects, the search process conducted by a personnel consultant to find a successor for a company is identical to the search for a managing director.
When it comes to business succession, the role of the advisor can go a little further in terms of advising the client and the candidate on suitable succession models. This calls for flexible transfer models that enable a business to be taken over gradually—e.g., through earn-out models, silent partnerships, or transitional dual leadership. This reduces the financial hurdle for potential successors and allows the experience of the previous owner to continue to be leveraged.
Executive Search Consultant for Telecommunications, IT & Consumer Electronics
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Klaus Mayerhanser is a founding partner and Managing Director of DELTACON Executive Search. With his team, he is responsible for the telecommunications, information technology and consumer electronics sectors and heads our office in Munich. In addition to his Executive Search Consulting activities, he has ten years of operational management experience in sales and marketing functions within the ICT industry.
Benefits for the entrepreneur
For entrepreneurs who want to sell their business, this model offers numerous advantages when hiring a personnel consultant. It is obvious that the owner does not have to close the business and even receives a reasonable purchase price, albeit spread over several years. In addition, the new managers bring fresh energy, strategic expertise, and a long-term vision to drive growth and innovation. This allows owners to secure the future of their business by entrusting it to a leader who not only values tradition but also has the ambition, skills, and support of experienced investors to take the business to the next level.