Berlin’s Looming Succession Crisis: A Quarter of Businesses at Risk
The German capital, a vibrant hub of entrepreneurship and innovation, is grappling with a significant challenge that threatens its economic stability: business succession. According to Manja Schreiner, CEO of the Berlin Chamber of Commerce and Industry (IHK), approximately a quarter of Berlin’s nearly 400,000 companies are facing a change in ownership within the next five years. This translates to a staggering 100,000 businesses that could face closure if no suitable successor is found.
This isn’t merely a statistic; it’s a profound societal and economic issue. The potential loss of these businesses represents not only jobs and economic output but also the erosion of decades of accumulated expertise and local heritage. As Schreiner aptly puts it, “The search for a successor for Berlin’s companies is a huge problem.”
The Succession Center: A Ray of Hope Amidst Bureaucracy?
In response to this pressing concern, a dedicated Succession Center was launched in November 2024. Funded by the Chamber of Skilled Crafts, the IHK, and the Investitionsbank Berlin, each contributing 150,000 euros, and initially supported by the Senate Department for Economics with 300,000 euros (now reportedly increased to 100 million euros), the center aims to be a vital intermediary. Its mission is to connect businesses seeking to transfer ownership with potential buyers.
As of March 2026, the center has registered 400 companies willing to transfer and 1,400 potential successors. Currently, 150 matching processes are underway, managed by a team of six employees with two additional positions open. While these numbers seem promising, the center has facilitated only one successful match in its 16 months of operation.
Schreiner, however, views this single success as a triumph, emphasizing the intricate and time-consuming nature of succession processes. “A successful match after just over a year is a success, considering that succession processes usually take three to five years,” she states. This perspective highlights the inherent complexities involved, where a quick fix is rarely an option.
The Emotional and Financial Hurdles of Handover
One of the primary obstacles in finding a successor, according to Schreiner, is the often-inflated valuation of their businesses by owners. “Entrepreneurs have naturally invested so much passion and are emotionally connected to their life’s work. Therefore, the asking prices often understandably go beyond purely rational economic figures,” she explains. To mitigate this, the IHK advocates for neutral business valuations, providing a more objective assessment of a company’s worth.
Another significant trend contributing to the crisis is the decreasing likelihood of children taking over their parents’ businesses. Schreiner points to a “growingly complex regulatory environment” and “a tremendous amount of bureaucracy” as deterrents. Inheritance and gift taxes present particular challenges in family successions, while data protection concerns also complicate matters. For external successors, capital gains and tax law often pose the biggest hurdles.
For many entrepreneurs, the sale price of their company is crucial for their retirement planning. Often, children are expected to buy out their parents, but they frequently lack the necessary capital. When an external successor takes over, there’s the added risk that the new owner might mismanage the company, jeopardizing the former owner’s retirement savings.
A Call for Federal Action and Long-Term Vision
The Berlin IHK’s experience with the Succession Center underscores a broader national issue. Hundreds of thousands of successions are pending nationwide in the coming years, predominantly affecting small and medium-sized enterprises (SMEs). Schreiner insists that “since this affects the entire SME sector, it is absolutely necessary that bureaucratic and tax hurdles are addressed at the federal level as well.”
The slow pace of successful matches at the Succession Center, despite its dedicated efforts, is a stark reminder that business succession is not a simple transaction. It is a deeply personal and often emotionally charged journey for entrepreneurs, intertwined with complex legal, financial, and bureaucratic considerations. While the center provides a much-needed platform, its effectiveness will ultimately depend on a concerted effort to streamline processes, offer realistic valuations, and address the underlying systemic issues that deter potential successors.
The future of Berlin’s diverse business landscape hinges on its ability to navigate this succession crisis. Without proactive measures and a long-term vision that extends beyond immediate solutions, the city risks losing a significant portion of its entrepreneurial spirit and economic vitality.
