Trust and Communication Pivotal in German SME Business Succession, Experts Say

Business succession in German SMEs hinges significantly on human factors such as trust, communication, and timing, according to recent expert insights from Bavaria. As revealed in the Nachfolgeradar Bayern report, nearly half of a company's succession success depends on the satisfaction of all parties involved. Daniela Klemm, an IHK succession expert, emphasizes that these human elements often outweigh traditional financial metrics like revenue or profit in determining successful transitions.

Only about 25% of businesses in Germany currently feel well-prepared for succession, with internal successions—whether familial or staff-based—being more emotionally rewarding than externally chosen successors due to a lack of internal options. Georg VII. Schneider, who recently executed a gradual handover of his family brewery Schneider Weisse, underscored the importance of openness and creating decision-making space for the next generation, facilitating a trust-based approach to the transition.

External successor Sebastian Kopp from Ziegler Erdbau highlighted the need to build trust with long-standing employees while also recommending alternative financial models beyond traditional bank loans to support succession. Christian Schönberger, a succession consultant, acknowledged that conflicts are normal throughout such changes and should be openly discussed to prevent them from harming the process.

Overall, the consensus among experts is that successful SME succession in Germany revolves around fostering interpersonal trust, effective communication, motivation, and flexibility among generations to adapt roles and responsibilities smoothly.