Two out of three entrepreneurs want to stop within 10 years, but business succession falters

• Aging population, complex processes, and emotional barriers jeopardise business continuity

• Agriculture, retail, and industry vulnerable due to aging population and lack of successors

• Entrepreneurs can mitigate risks through timely planning, phased transfers, and alternative succession models

Aging population and lack of successors put continuity under pressure

Although over two-thirds of Dutch entrepreneurs aim to stop running their businesses within ten years, a significant proportion has not yet arranged succession plans. This is evident from the Sector Forecasts 2026-2027 published today by ABN AMRO. The bank, in collaboration with Ipsos I&O, conducted research into business succession among 519 entrepreneurs. For 22 percent of the group intending to stop within ten years, there are no concrete plans for business succession. Meanwhile, 20 percent are searching but have yet to identify a successor. Delays in business transfer and the aging population increasingly heighten the risk of value loss. Currently, nearly 13 percent of entrepreneurs are aged 65 or older, compared to 7 percent in 2010. In sectors where older entrepreneurs are relatively prominent - such as agriculture, retail, and industry - this risk increases. Similarly, in sectors dominated by family businesses - such as agriculture, hospitality, and automotive trade - failing to start succession planning in a timely manner raises the likelihood of business closure and loss of knowledge, jobs, and capital. These 300,000 family businesses account for over 30 percent of all jobs in the Netherlands and nearly 30 percent of the added value of the (non-financial) business sector.

External parties increasingly involved in business succession

Various barriers hinder timely succession planning. Many entrepreneurs struggle with establishing the value of their business, understanding legal and fiscal regulations, and letting go of their company. This emotional attachment and uncertainty about the future add complexity to the process. While family transfers remain common, entrepreneurs are increasingly considering alternative succession models. For example, they are opting for alternatives such as management buy-outs or buy-ins, employee buy-outs, or sales to strategic buyers*. As younger generations are less inclined to continue the business - driven by different ambitions, insufficient resources, or lacking the necessary competencies - more entrepreneurs are seeking such alternatives. Additionally, phased transfers provide a smoother succession process and help limit financial risks. Such transition phases can, for instance, reduce the impact of worsening economic conditions and enable buyers to finance the acquisition step by step. Furthermore, phased transfers reassure employees and customers, as the entrepreneur remains temporarily involved.

Timely measures crucial to ensuring continuity

Despite the challenges, ABN AMRO indicates that prospects for many sectors remain positive, provided entrepreneurs take timely action. Successful business succession benefits not only the entrepreneur but also contributes to job preservation, regional economies, and productivity in the Netherlands. The bank emphasises that timely planning is essential to mitigate risks and ensure continuity.

"Entrepreneurs are well-advised to consider various scenarios, organise the business transfer step by step, and identify both internal and external candidates. It may also be beneficial to involve an advisor early on," says Gerarda Westerhuis, Sector Economist for Leisure and Retail at ABN AMRO. "Many entrepreneurs realise too late how complex business succession can be. By starting early, they can explore all relevant options. This also allows them to gain timely insight into the value of the business and explore fiscal opportunities. Aligning the interests of owners, management, financiers, and other family members in advance is another success factor. It is also worthwhile to explore alternative succession methods, extending the search beyond family to include external parties."

*Here, the entrepreneur sells the business to a party within the same sector, such as a competitor or supplier.