Preparing Succession: Making Your Company Transferable

Preparing succession means making the company transferable: independent of its owner, with clear structures, clean numbers and a realistic timeline of three to five years. Those who only start preparing when the successor search begins have already given away the most important value levers.

How we guide owners through business succession — from the first decision to the handover — is set out on our services page.

The numbers show what happens without preparation. According to the KfW Succession Monitoring 2025, around 569,000 owners in Germany plan to close their company by the end of 2029 — for the first time more than those seeking succession (around 545,000). How many of these businesses would have been transferable with earlier preparation has not been measured. What is certain: with lead time, room to manoeuvre grows; without it, it shrinks.

Why do successions fail at preparation?

Because succession is not an event but a process over years. A successor — family, employee or external buyer — only takes over what they understand and what works without the departing owner. Neither emerges in the three months before the handover.

The KfW survey shows where it sticks: 69 % of mid-sized German companies see finding a suitable successor as a hurdle, 45 % the administrative burden and 32 % the legal and tax complexity. Of the owners planning a succession, only 26 % had found a successor in 2025. The DIHK recommends starting concrete planning and the successor search at the latest three years before the intended handover (KfW Fokus Volkswirtschaft No. 526, 9 January 2026, charts 8 and 9).

In Austria, according to the federal ministry (BMWET), around 52,500 companies excluding one-person companies face a handover between 2025 and 2034 — nearly 23 % of all employer businesses, with around 705,000 employees (BMWET, business succession, retrieved 14 October 2026; the page gives no date of issue).

What does transferable mean?

A company is transferable when a third party can run it: decisions do not rest solely with the owner, processes are documented, customer relationships are anchored in the company, the numbers are traceable, and the legal affairs are in order. Each of these points can be tested — and each missing one costs price or survival.

Building block	Key question
Leadership	Is there a second level that can carry the business?
Customers	Do the key relationships depend on the owner personally?
Processes	Are pricing, purchasing, sales documented?
Numbers	Do the accounts show the real, sustainable result?
Legal	Are articles, powers of attorney, contracts up to date?

What buyers look at to judge transferability

A buyer does not test whether the owner ran the company well, but whether it keeps running without them. The six areas below recur in every buyer review; each buyer sets its own thresholds, and there are no generally valid limits.

Area	What is measured	Warning sign	What you can do
Owner dependency	Which decisions, quotes and customer conversations run exclusively through you?	The business stalls when you are away	Transfer decision rights in writing to a second level
Customer concentration	Share of revenue from the largest customers	A few customers carry a large part of revenue	Framework agreements; spread relationships across several people
Earnings quality	Result after adjusting for private items, one-offs and a market-level managing director salary	Private expenses in the business, unusual salaries	Document the adjustments; keep accounts comparable across several years
Contracts	Terms, change-of-owner clauses, the lease of the premises	Key contracts end or can be terminated when the owner changes	Review contracts; extend or amend them in good time
Key people	Who holds which knowledge, how long are notice periods?	Know-how sits with one person	Document knowledge; settle retention and cover
Legal	Articles of association, powers of attorney, business property held privately	Consent requirements or clauses that obstruct a sale	Put the structure in order with a lawyer and tax adviser

How do you reduce owner dependency?

Step by step and visibly: transfer responsibility to a second management level, spread customer relationships across several shoulders, move knowledge from your head into documented processes — and make yourself dispensable by design. This is the single most effective lever for transferability and company value alike — what your business is worth today is settled by a company valuation.

A simple test works in practice: three weeks of absence, without calling in. Whatever piles up in that time is your preparation list.

An illustrative example (not a mandate): an owner prices every quote himself and leads every first conversation with new customers. Preparation starts with pricing: he documents his pricing logic, has an employee price in parallel for two quarters, compares the results and then hands over sign-off. After that he moves the first conversations over step by step. To a buyer, that is a different company from before, although neither revenue nor product has changed.

Owner dependency is also the first thing every buyer checks in a sale. For the sale perspective, see Preparing a Company Sale.

Which succession routes are open?

Family handover, sale to employees (MBO), takeover by external managers (MBI), sale to a strategic buyer or investor — or hybrids. Preparation is the same for all routes; the decision for one route is best made when the company is already transferable.

Because then you have the choice. An overview of the options: Succession Options. How the process then unfolds: The Five Phases of Succession.

Where preparation differs by route

Route	Preference of owners planning succession (KfW 2025, multiple answers)	What preparation additionally targets
Family member	55 %	Clarify interest and suitability early, equalisation among siblings, compulsory-portion questions
External buyer	42 %	Adjusted numbers, documents for buyers, valuation, confidentiality
Employees	28 %	Financing the takeover, see financing an MBO
Co-owners	24 %	Articles of association, valuation clause, buy-out rules

Looking back, the IfM Bonn meta-analysis (23 studies over about 40 years, family businesses) shows: a good half of transfers within the family, 17 % to employees, 29 % to external buyers (IHK Stuttgart on IfM Bonn, Daten und Fakten No. 37, retrieved 14 October 2026). Preference and practice are close; preparation still applies to every route, because the preferred one is not always open: 47 % of owners planning closure name lack of interest in the family as (part of) the reason.

What does a realistic timeline look like?

Structural preparation starts three to five years before the handover, clarifying route and preferred successor two years before, and the actual handover or sale process runs in the final year. Starting earlier buys room to manoeuvre — starting later loses options.

Time before handover	Focus
5–3 years	Build second level, document processes, normalise numbers
3–2 years	Clarify succession route, review tax structure with advisors
2–1 years	Search for successor or prepare sale process
Final year	Execute handover/sale, onboarding, communication

Whether the time has come for you: When is the right time to hand over?

Status of the details and sources: 14 October 2026.

FAQ

When should I start preparing succession?

In our practical assessment, three to five years before the planned handover. Structural changes need one to two financial years until they take effect and become visible to successors (practical assessment, not a statistic). The DIHK recommends planning concretely and searching for the successor at the latest three years before the intended handover (quoted from KfW Fokus No. 526).

What happens if I do not prepare the succession?

At best, a sale with discounts. At worst, closure: according to the KfW Succession Monitoring 2025, around 569,000 owners plan to close by the end of 2029, while around 545,000 want to find a successor. The most frequent reasons among owners planning closure are reaching retirement age (52 %), lack of interest in the family (47 %) and bureaucracy (42 %; multiple answers). Customer base, jobs and life's work are lost — in many cases avoidably.

Can I prepare without committing to a succession route?

Yes. Transferability is the same for all routes — family, MBO, external sale. You decide later, from a stronger position. A checklist for the handover step itself: Company Handover Checklist.

What price do owners expect who want to hand over in the coming years?

According to the KfW Succession Monitoring, owners handing over within five years have price expectations averaging about EUR 499,000 (median EUR 375,000), equal to 1.2 times annual revenue on average and 0.6 times at the median. These are owners' expectations, not prices achieved. A valuation provides a reliable assessment for your business.

How many companies in Germany and Austria are due for handover?

For Germany, IfM Bonn estimates around 186,000 transfers for 2026 to 2030, and the KfW Succession Monitoring around 545,000 owners wanting to find a successor by the end of 2029 (different survey definitions). For Austria, the BMWET gives around 52,500 companies (excluding one-person companies) for 2025 to 2034.

The best succession starts years before closing. Talk to IGCP Capital Partners GmbH early and in confidence — independent, discreet, at eye level. → igcp.at

A first order of magnitude for the handover comes from our company value calculator — free and without obligation.