In 2025, Germany set a dismal record: more companies went out of business than at any time in nearly two decades. This was reported by *Manager Magazin*, among others. But the crisis isn’t limited to financially struggling firms—even healthy companies are being forced to cease operations. The reasons? High costs, a shortage of skilled workers, and a lack of successors are driving this trend. At the same time, an analysis by Creditreform shows that a total of 196,100 businesses in Germany closed in 2024—a 16% increase compared to the previous year. Particularly affected are micro-businesses with no more than four employees, which, with over 170,000 cases, account for the majority of the closures.

The Main Reasons for Business Closures

  1. High costs and economic burdens

Rising operating costs—from energy expenses and rent to regulatory requirements—are putting pressure on many companies. Even financially stable firms cannot bear this burden in the long run. “The crisis is now eating its way through the entire economy,” warns Patrik-Ludwig Hantzsch, head of Creditreform Economic Research. Sectors such as healthcare are particularly hard-hit; in 2024, 10,800 businesses in that sector closed—nearly twice as many as in 2003 (5,700 cases).

  1. Skills Shortage: The Battle for Qualified Employees

The shortage of skilled workers is a major problem that is bringing many companies to their knees. Without sufficient staff, businesses can no longer offer their services or products at the usual level of quality. This leads to a decline in revenue and, ultimately, to closure. Small and medium-sized enterprises (SMEs) are particularly hard-hit by this trend, as they often cannot compete with the salary offers of larger competitors.

  1. A Lack of Successors: The Silent Threat to Family Businesses

One factor that is often underestimated is the lack of successors. Many business owners, especially in traditional family-run businesses, reach retirement age—yet there is no one to take over the business. “More and more businesses are closing because business owners are retiring and can’t find a successor,” experts say. This affects small businesses, retail stores, and small service providers in particular.

The Numbers Behind the Trend

  • 2023: 169,000 closures
  • 2024: 196,100 closures (+16% compared to 2023)
  • Sectors particularly affected:
    • Health care (10,800 closures in 2024, nearly twice as many as in 2003, when there were 5,700 cases)
    • Micro-businesses with no more than four employees (over 170,000 cases in 2024)

Why Most Businesses Die a “Quiet” Death

Not all closures are the result of insolvency. Many companies wind down their business operations in a deliberate and orderly manner without entering insolvency proceedings. This often occurs through:

  • Voluntary closure (e.g., due to a lack of successors or the owner’s retirement)
  • Sale or Merger with Other Companies
  • Reorganization under an Orderly Process

Although insolvency figures rose by 24% in 2024, they represent only a fraction of the total number of business closures. Most businesses disappear without much fanfare, which obscures the true scale of the crisis.

Conclusion: What does this mean for the German economy?

The decline of businesses in Germany is not a short-term phenomenon, but a structural problem. The combination of soaring costs, a shortage of skilled workers, and a lack of successors threatens the diversity of the business landscape—especially in rural areas and among small businesses. Without countermeasures, this trend could intensify further in the coming years.