Demographic change poses major challenges for Saxony-Anhalt. The population is ageing and shrinking, which is affecting rural regions in particular. This also means that many entrepreneurs in Saxony-Anhalt are about to retire. Unfortunately, processes needed for successful business successions are often not well organized by the involved stakeholder entities. Such successful handovers of well-managed companies are, however, crucial to maintaining and strengthening the state’s economic power.  Without a suitable successor, functional businesses are threatened with closure, which not only results in job losses but also weakens the regional economy year after year.

The numbers are speaking for themselves: In the next seven years, more than 1,550 company owners will reach retirement age in Saxony-Anhalt every year. In relation to the current total number of companies, this means that at least 10,600 companies and company shares will be handed over in Saxony-Anhalt by 2030, of which around 6,100 will be sole proprietorships. In order to maintain the current density of companies, at least 6,164 sustainable start-ups of sole proprietorships would then be required annually in Saxony-Anhalt with a declining population, which would have to last until retirement age. That would be 15.5 per cent more than the average of the past five years.[1]

Evidently, Saxony-Anhalt faces major challenges with regard to taking care of business successions. However, the state has taken countermeasures to tackle these challenges and was already able to significantly increase the share of business successions in the last years. Most prominent is the business succession network inside the state (Netzwerk Unternehmensnachfolge Sachsen-Anhalt /N:UN), an initiative under leadership of the regional chambers. The network offers a variety of services towards both stakeholder sides of business succession which facilitates the continuity and survival of companies. It does so by:

  1. Individual advice and coaching: The network offers customised advice and coaching services to optimally prepare both succession seekers and successors for the company handover. Experts accompany those involved throughout the entire process, from the initial contact to the successful handover.
  2. Workshops and seminars: It regularly organises workshops and seminars that provide comprehensive information on all aspects of company succession.
  3. Mediation and matching: With the help of its extensive database and wide-ranging network, it supports the targeted mediation between successors and succession seekers. Its matching service aim to ensure that the ideas and requirements of both sides are harmonised in the best possible way.
  4. Information platforms: On its website (https://www.unternehmensnachfolge-lsa.de) and in within regular publications, interested stakeholders can find a wealth of information on the topic of business succession. This offers a broad knowledge base ranging from current news and specialist articles to experience reports (success stories but also failures).
  5. Networking events: It also organises networking events which offer an excellent opportunity for personal dialogue. Here, successors, succession seekers and experts can socialise, share experiences and learn from each other. In fact, the final Succession Ready multiplier event will be integrated into such event on 21.06.2024 in the town Landsberg, featuring the most prominent results of the project.
  6. Funding programmes and financial assistance: Last, the network also provides information on various funding programmes and financial assistance that are available specifically for business succession. This support can make a decisive contribution to overcoming financial hurdles and enabling a successful handover.

In fact, the most important support programmes are offered by the Investment Bank of Saxony-Anhalt (Investitionsbank Sachsen-Anhalt), a financial institution under ownership of the state of Saxony-Anhalt which organizes the distribution of public funding inside the state. The programme called “ego.-WISSEN” offers free start-up courses (in groups) organised by the local start-up support agencies in the various regions of Saxony-Anhalt. These courses provide specialised support on the topic of self-employment and delivers core business knowledge which is often times crucial for take-over candidates. Moreover, the sister programme “ego.-START” provides financial assistance for multi-day coaching on topic relating to business, financial and organisational questions of business creations or take-over. On top of that, the “ego.-KONZEPT” programme offers access to a large number of support agencies that female founders, university graduates, founders with a migration background and interested school pupils and young people can contact free of charge. Of course, this accredited ready-for-support contacts  can also play a crucial for facilitating business succession and also guarantee that support services offered meet high-quality requirements.

Although businesses succession remains a challenge inside the state, it is because of support schemes and networks as presented in this article that Saxony-Anhalt has taken a promising pathway already. Nevertheless, more initiatives and knowledge brokering is needed to continuously increase the number of successful take overs  which was also a main motivator behind the genesis of the Succession Ready project.

[1] Source: Nachfolgereport 2023 des Netzwerk Unternehmensnachfolge Sachsen-Anhalt