Switzerland’s economic fabric rests on its small and medium-sized enterprises. They are its backbone: more than 99% of companies in the country are SMEs, and they account for two-thirds of all jobs, or around three million people, according to the Federal Statistical Office. But behind this success lies a structural challenge of unprecedented scale. In the years ahead, tens of thousands of business leaders will reach retirement age. According to a Dun & Bradstreet study published in 2024, more than 101,000 companies are currently looking for a successor; a trend directly linked to the ageing of company heads and the coming of age of the baby-boomer generation. The transfer of an SME is not just a change in leadership: it shapes the future of dozens of jobs, sometimes of regional know-how and, in some cases, of a family legacy built over several generations.

Historically, the handover of Swiss SMEs took place mainly within the family. That model remains significant, but it is evolving: according to data from the Confederation’s official SME portal, around 42% of businesses are still passed on to a direct descendant, while 23% go to internal managers or partners. This shift is explained by several converging factors: younger generations do not always want to take over the family business, management requirements have changed substantially, and running an SME now means mastering complex issues such as digitalisation, the energy transition, international expansion and talent management. Internal succession through senior executives, known as a management buy-out, is therefore gaining ground, allowing the outgoing founder to hand over responsibilities gradually while ensuring strategic continuity, even if the required financing can be a hurdle. Beyond these two traditional routes, new profiles are emerging: entrepreneurs who prefer to acquire an existing business rather than launch a start-up, investors or industrial groups seeking to consolidate a sector, and funds specialising in SME acquisitions. The succession market has become professionalised, backed by a powerful argument: according to the Confederation’s official SME portal, the five-year survival rate of an acquired company reaches 95%, compared with 50% for a business created from scratch. Despite this diversification of solutions, the risk of closure remains very real: one SME in three shuts down for lack of a buyer when its owner retires, a phenomenon that primarily affects smaller businesses highly dependent on their founder, where expertise, customer relationships and reputation often rest on a single person.

Beyond the numbers and legal structures, the transfer of an SME is first and foremost a human test. For an entrepreneur who has spent twenty or thirty years building a company, stepping aside touches on something far deeper than a mere management decision: it is often a challenge to identity, the grief of relinquishing a social role, sometimes the end of a life project. Support specialists report that these psychological barriers, rather than technical or financial obstacles, are most often behind the deadlocks and delays. In family businesses, the emotional dimension is even more intense: to hand over the company is to pass on a name, a history, sometimes the work of several generations. Yet this emotional weight has a direct economic cost. Most business owners tend to overestimate the value of their company; in some cases, the gap between the value perceived by the seller and that assessed by an independent expert can reach 30% to 50%. SME valuation is based on proven methods: net asset value, EBITDA multiples, generally ranging from three to six times operating profit depending on the sector, or discounted cash flows. But beyond the tools, it is often the company’s ability to function without its founder that determines its true value in the eyes of a buyer. A business overly dependent on a single personality will see its valuation mechanically reduced, because the risk of customer defection after the sale is real and measurable. That is why succession advisers recommend starting, several years before the handover, a deep process of delegation, documentation of processes and retention of key teams, all measures that translate directly into value at the time of sale.

The stakes go far beyond the individual interests of entrepreneurs. With more than 600,000 SMEs employing around three million people, the future of these businesses is a determinant of the country’s economic stability. A successful handover preserves jobs and maintains a diverse, innovative business landscape; poorly prepared succession, by contrast, can weaken entire regions, particularly in industrial or artisanal sectors. Yet according to a PwC study, 47% of family businesses have still taken no concrete steps in this direction, even though a succession process takes an average of five to seven years to prepare. Identifying a successor, organising the transfer of skills, structuring financing and clarifying legal matters: these are all stages that require time and cannot be improvised. This wave of transfers nevertheless carries an opportunity. A new generation of entrepreneurs could bring fresh ideas, accelerate digitalisation and open new international markets. Family heirs will continue to play a role, internal managers will take on greater responsibilities, and new buyers will seize opportunities left on the table by others. The way this transition is managed will largely determine the country’s economic future. Because behind every SME lies much more than a company: a history, a body of know-how and, often, a community that depends on its continuity.

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