Europe’s Biggest Entrepreneurial Challenge (and Opportunity)
What happens when thousands of SME owners retire without successors? A challenge, a risk, and a once-in-a-generation opportunity.
This week, I want to step back from models and strategies and talk about a reality that’s shaping the entire future of entrepreneurship in Europe: the succession gap.
It sounds abstract, but it isn’t. Every week I hear about another small business in Germany, the Netherlands, or the UK where the owner wants to retire but can’t find anyone to take over. Behind those headlines are companies with decades of history, employees who depend on them, and communities that rely on their services.
This is not a niche problem. In fact, it’s one of the most important forces shaping the future of small and medium-sized enterprises (SMEs) in Europe. For anyone in the ETA world, whether you’re a buyer, investor or advisor, this is both a challenge and a once-in-a-generation opportunity.
The Scale of the Succession Gap
Let’s look at the numbers.
In Germany, about 30% of SMEs face succession problems. The German Chambers of Commerce (IHK) and reports in Tagesschau and Wirtschaftswoche highlight that thousands of owners simply have no plan. In many cases, their children don’t want to continue the family business.
In the UK and Scotland, surveys by firms such as Armstrong Watson reveal a similar story. A significant share of owners have no clear successor and are pushing decisions further into the future. Some businesses are sold under pressure; others simply shut down.
Zoom out to Europe as a whole, and the scale becomes staggering. Millions of Baby Boomer-owned businesses will change hands in the coming years. The Guardian and Business Insider both point out that this is the largest wealth and ownership transfer in history.
Contrast this with the United States: the SBA loan structure and a mature ETA ecosystem make it relatively common for outsiders to step in. In Europe, succession is still too often seen as a family-only matter. If there’s no child ready to take over, businesses drift until closure becomes the only option.
Why This Matters: Challenge and Opportunity
The succession gap cuts both ways.
The challenge:
Jobs are at risk when viable companies close.
Local communities lose essential services.
Families see decades of wealth creation disappear.
These points alone would justify policymakers, banks, and chambers of commerce sounding the alarm. But the challenge is deeper than statistics: it’s about the human side of entrepreneurship. Imagine running a company for 30 or 40 years, then discovering that without a successor, everything you built could simply vanish. It’s no surprise that many owners delay succession planning until the very last moment.
The opportunity:
For first-time buyers, this represents the single largest transfer of entrepreneurial ownership in history.
While many of these companies are profitable, stable, and respected, they lack continuity.
The need for responsible acquirers is enormous.
This means the succession gap is both a looming problem and an incredible opening. Those who step in not only gain ownership of solid companies, but also preserve livelihoods and safeguard communities. ETA provides a practical path to do exactly that.
📖 Want to go deeper?
I recently wrote about this topic on LinkedIn:
👉 Why the Succession Gap is a Goldmine for First-Time Buyers
Lessons from Practice
Theory is one thing; practice is another.
From my interviews and conversations, a few lessons stand out:
The seller’s challenge goes beyond numbers. Letting go of a business is deeply emotional. It’s tied to identity. Many owners hesitate not because the valuation isn’t fair, but because they can’t imagine life after the business.
The buyer’s challenge is often underestimated. Stepping in as a new owner means absorbing not just financials but also culture, relationships, and tacit knowledge. Without a careful transition, even a “perfect” acquisition can stumble.
Trust matters more than spreadsheets. In European contexts especially, deals succeed when sellers believe in the buyer as a person. Credentials and business plans are important, but the human fit often makes or breaks the deal.
Smart money beats money alone. Financing is always challenging in every country. But what really matters is not just capital. It is capital combined with capability. Investors who bring networks, governance experience and strategic patience are essential.
Put differently: closing a deal is not the end, it’s the beginning. The real test starts when the new owner has to prove to employees, customers, and communities that they are worthy of trust. This is where patience, resilience, and a long-term mindset become decisive.
Why ETA Fits Here And Why Now
This is exactly where Entrepreneurship Through Acquisition has its strongest relevance in Europe.
ETA is not a hype concept here; it’s a practical solution to a structural problem. Thousands of businesses need new stewards. Traditional succession channels can’t cover the gap.
But why is this the right moment?
Demographics: Baby Boomers are retiring in waves. This creates urgency. Within the next five to ten years, decisions will be made that determine whether businesses survive or vanish.
Millennials and Gen Z: This generation is uniquely positioned to step in. Many are seeking entrepreneurial paths outside traditional startups. They value autonomy, impact, and ownership. ETA gives them the chance to build, not from scratch, but from a solid foundation.
Changing mindset of owners: Older generations are becoming more open to selling outside the family. A professional buyer who brings energy and vision is increasingly seen as a legitimate successor.
Capital availability: While financing in Europe is more fragmented than in the U.S., there is growing interest among investors, banks, and family offices in supporting ETA-style deals. Smart money is slowly moving toward this space.
For me, this is why ETA matters here and now. It is a bridge between generations, a mechanism to carry forward valuable businesses, and a chance for the next generation of entrepreneurs to shape the real economy.
Reflection
The succession gap is not just an economic statistic. It’s a generational moment.
It forces us to ask: who will own and operate the backbone of Europe’s economy in ten years’ time? Will these companies disappear quietly, or will a new wave of entrepreneurs step in to carry them forward?
I believe this is where communities matter. That’s why I started Buyout Diary. That’s why I launched the Amsterdam ETA Meetup. These are ways of making ETA more visible, less lonely, and more collaborative.
Solving the succession gap won’t happen in isolation. It will require buyers, investors, advisers, and ecosystems from across borders to work together.
And I’d love to hear from you:
👉 Have you seen succession challenges in your country?
👉 Do you know businesses that are struggling to find a successor?
👉 How do you see yourself in this generational shift?
Hit reply and share your story.
🎓 Personal Highlight: MBA Graduation
I’m pleased to share a personal milestone: I’ve officially graduated with my MBA from the University of Greenwich, London. My dissertation was titled:
“An Investigation of Governance Structures, Control Mechanisms, Incentives, and Knowledge Transfer in HoldCo-Led Small Business Acquisitions in the United States.”
The research I conducted for my dissertation, which focused on governance, the ETA, and succession, will now influence not only my own path, but also the future direction of content on Buyout Diary. In the coming weeks, I’ll create a way for subscribers to access insights from the thesis.
Closing
The succession gap is real and urgent everywhere. While it is a challenge, it is also an opportunity for those prepared to step up.
I believe ETA will play a central role in closing that gap, not by chasing quick wins, but by stewarding businesses for the long term.
Thank you for reading, and for being part of this journey.
Until next Monday,
Alexander