Selling a business is one of the biggest decisions in an entrepreneur’s life. This guide gives an overview of all the key questions: when is the right time, what is the company worth, who are the potential buyers and what does the sale cost? We describe the sale process in detail in our article The business sale process.
Why are so many owners selling right now?
Germany’s Mittelstand (its mid-sized, largely owner-managed companies) is facing a wave of handovers. According to the KfW succession monitoring, around 545,000 mid-sized companies are aiming for a succession by the end of 2029. Of the mid-sized companies with succession plans, 42 percent are considering a sale to external buyers. IfM Bonn expects around 186,000 companies to be ready for handover between 2026 and 2030.
For sellers, this means the supply of companies for sale is rising. Those who are well prepared stand out.
When is the right time to sell?
There is rarely a perfect moment. There are, however, clear signals that speak for or against a sale within the next twelve months.
| Signal | Speaks for selling now | Speaks for waiting |
|---|---|---|
| Earnings trend | Stable or growing over three years | Slump in the last year |
| Dependence on the owner | Second management level in place | Everything runs through the owner |
| Customer structure | Broadly spread | One major customer dominates |
| Personal situation | Clear plans for afterwards | Uncertainty about your own role |
| Investment needs | Equipment and IT up to date | Large investment backlog |
| Market | Buyers active, industry in demand | Industry in upheaval |
The most common mistake is starting too late. According to the DIHK report, 38 percent of owners prepare the handover too late. If you only sell when your health, motivation or figures are declining, you negotiate from a weak position.
What is my business worth?
For mid-sized companies, business value is usually determined using multiples: a multiple of sustainable, adjusted earnings, typically EBITDA or EBIT. The capitalised earnings method or DCF methods are used as a supplement. More on this in our article on business valuation.
More important than the method are the factors that move the multiple up or down:
| Value drivers | Value detractors |
|---|---|
| Recurring, contractually secured revenue | Dependence on a few customers |
| Independent management | Know-how and contacts held only by the owner |
| Stable growth and good margins | Fluctuating or declining earnings |
| Clear market position, specialisation | Interchangeable offering |
| Clean figures and contracts | Unclear bookkeeping, verbal agreements |
| Modern equipment and IT | Investment backlog |
According to the DIHK, 36 percent of outgoing owners expect excessive prices. A realistic indication of value before launch protects against failed negotiations.
Who buys mid-sized companies?
| Buyer group | Typical interest | What it brings |
|---|---|---|
| Strategic buyer | Market share, synergies, technology | Often the highest willingness to pay |
| Financial investor (private equity) | Value creation, exit after a few years | Capital, professionalisation |
| Family office | Long-term investment | Patient capital, continuity |
| Entrepreneur, MBI, search fund | An entrepreneurial role of their own | Personal commitment |
| Own management (MBO) | Taking over the familiar business | Knows customers and processes |
Which group fits depends on your goals: the highest price, continuity of the name, security for employees or your role after the sale. Details in our articles Selling to investors and Business succession.
What exactly is being sold?
There are basically two forms:
| Share deal | Asset deal | |
|---|---|---|
| What is sold? | Shares in the company | Individual assets, contracts, customers |
| Typical for | GmbH, AG | Sole proprietorships, business units |
| Contracts | Remain in place | Must be transferred |
| Employees | Remain with the company | Transfer to the buyer under § 613a BGB (German Civil Code) |
For a GmbH, the share deal is the rule, see Selling a GmbH. If you do not want to give up everything, you can also sell only part, see Selling company shares.
Which documents do you need for the sale?
Buyers decide on the basis of figures and documents. The more complete they are, the faster and more securely the sale proceeds.
| Area | Typical documents | Tip |
|---|---|---|
| Finance | Annual financial statements for the last three years, current management accounts (BWA), business plan | Show one-off effects and private costs separately |
| Corporate | Articles of association, commercial register extract, list of shareholders | Check transfer restrictions (Vinkulierung) and pre-emption rights in advance |
| Contracts | Customer, supplier, rental and leasing agreements | Flag change-of-control clauses |
| HR | Organisation chart, employment contracts, pension commitments | Show key people and how they are retained |
| Tax | Tax assessments, tax audit reports | Clarify open risks early with your tax advisor |
| Operations | Fixed asset register, IT systems, certificates, permits | State investment needs honestly |
These documents later form the data room for due diligence. If you compile them before approaching buyers, you avoid delays and price reductions.
Sell on your own or with an M&A advisor?
| Criterion | Selling on your own | With an M&A advisor |
|---|---|---|
| Reach | Own network, marketplaces | Targeted, anonymous approach to many buyers |
| Competition | Usually one interested party | Several bidders in parallel |
| Time commitment for you | High, alongside day-to-day business | Considerably lower |
| Confidentiality | Harder to control | Teaser, NDA, staged data room |
| Costs | Low | Fee, usually largely success-based |
| Useful for | Very small businesses, buyer already known | Companies with revenue of around €1 million or more |
A free starting point is the nexxt-change marketplace run by the German Federal Ministry for Economic Affairs and KfW, which by its own account has brokered 19,000 successions since 2006. It is suited above all to smaller businesses. For larger companies, experience shows that a structured auction process with several interested parties strengthens price and deal certainty.
What costs arise when selling a business?
| Type of cost | What for | When |
|---|---|---|
| M&A advisor | Valuation, documents, buyer search, negotiation | Base fee plus success fee on completion |
| Lawyer | Purchase agreement, warranties, negotiation | Based on time spent |
| Tax advisor | Tax structure, normalisation of figures | Based on time spent |
| Notary | Notarisation for GmbH shares and real estate | According to the statutory fee schedule |
| Vendor due diligence | Review before the sale, optional | Before approaching buyers |
You should always measure the advisor’s costs against the result: one additional bidder often changes the purchase price more than the fee. More on this in our article M&A advisor fees.
Which taxes apply?
The tax burden depends on the legal form and the seller. In Germany, sole proprietors and partners in a partnership can, from age 55, make one-off use of an allowance and a reduced tax rate. If you hold GmbH shares privately, 60 percent of the gain is taxed under the partial income method (Teileinkünfteverfahren). Via a holding company, capital gains are 95 percent tax-exempt, provided it was set up in good time before the sale. You will find the overview with sources in our article The business sale process. Always discuss the structure with your tax advisor early on.
Checklist: the first five steps
- Clarify your goals: Selling all or part, your role afterwards, your priorities.
- Assess the value: An indication of value based on adjusted figures.
- Fix weaknesses: Reduce dependencies, put agreements in writing.
- Plan taxes: Review the structure with your tax advisor.
- Set up the process: Choose an advisor, prepare documents, approach buyers in a targeted way.
Conclusion
Selling a business successfully can be planned. If you start early, assess the value realistically, know the right buyers and run the sale in a structured way, you achieve better prices and secure your life’s work. In a confidential initial conversation, we clarify where your company stands today.
Sources
- Nachfolge-Monitoring Mittelstand 2025 (KfW Research Fokus Nr. 526), KfW Research, Dr. Michael Schwartz, January 2026
- DIHK-Report Unternehmensnachfolge 2025, Deutsche Industrie- und Handelskammer, July 2025
- Unternehmensnachfolgen in Deutschland 2026 bis 2030 (IfM Bonn), IHK Dresden, January 2026
- nexxt-change: Unternehmensnachfolgebörse, Gründerplattform von BMWK und KfW
- Strukturierter Bieterprozess versus bilaterale Verhandlung, Unternehmeredition, Boris Dürr (Heuking), October 2024
Frequently asked questions
How do I find a buyer for my business?
There are three routes: your own network, business marketplaces such as nexxt-change, or an M&A advisor who approaches strategic buyers, investors and entrepreneurs in a targeted and anonymous way. For companies with revenue of around €1 million or more, a structured process with several interested parties usually leads to better results.
How much is my business worth?
For mid-sized companies, value is usually determined as a multiple of sustainable, adjusted earnings (EBITDA or EBIT). The level of the multiple depends on industry, size, growth, risks and dependence on the owner. In the end, the actual price is determined by competition between buyers.
How long does it take to sell a business?
The actual sale process usually takes six to twelve months. On top of this comes the preparation of the company, for which you should ideally allow two to three years.
Can I sell my business without an advisor?
Yes, especially for very small companies or when the buyer is already known. For larger companies, an advisor usually increases the number of interested parties, relieves you in day-to-day business and improves your negotiating position. You will need a lawyer and a tax advisor in any case.
What does it cost to sell a business?
Typical costs are the M&A advisor's fee (usually a base fee plus a success fee), legal and tax advisory costs, notary fees for GmbH shares and, where applicable, a vendor due diligence. The amount depends on the size and complexity of the transaction.
Do I have to stay in the company after the sale?
Not necessarily, but a transition period is often agreed so that customers, employees and know-how are transferred securely. The more dependent the company is on its owner, the longer buyers want this period to be.
When should employees learn about the sale?
As a rule, only shortly before or after signing. Until then, anonymised documents and non-disclosure agreements ensure that no unrest arises. Key people are often involved earlier and in a targeted way.