The SME sector primarily needs competitive framework conditions that enable small and medium-sized enterprises to succeed in highly contested markets. The core of entrepreneurship encompasses investing in the future and not shunning risks. This is especially characteristic of owner-operated and family-run businesses. 

When it comes to specific demands to policymakers, the reduction of unnecessary bureaucratic burdens is consistently ranked high on the agenda. This includes obligations arising from the recently adopted EU Supply Chain Act in Brussels and the national implementation of European sustainability reporting (refer to chapters "Reduction of Bureaucracy and Better Regulation", "Sustainable Finance" and "Internal Market"). The internationally high corporate tax burden is another significant hindrance for SMEs. Positive incentives could be created if policymakers improved the tax benefit for profits retained and reinvested within the company, aligning the tax treatment of equity between partnerships and corporations (refer to chapter "Tax Policy").

Understanding entrepreneurial activities should be enhanced by creating a more intense and continuous dialogue between businesses, media, governments, parliaments, financial partners, administrations, and other societal actors. This strengthens startups, innovative start-ups, as well as small and medium-sized enterprises, and increases appreciation for entrepreneurship. Particularly in the context of digitalization, all actors relevant to starting businesses require better comprehension of evolving business models and changing financing requirements and opportunities. Most IHKs propose that programs enabling politicians to intern at businesses could contribute to this. This way, political decision-makers can better comprehend how their actions affect day-to-day business life.

From the perspective of the economic community, concepts like "Economy" and "Entrepreneurship" are still inadequately incorporated into the educational journey. To prepare students for future roles, these subjects must be emphasised nationwide, fostering foundational economic understanding alongside entrepreneurial thinking and actions. Companies are pushing for stronger initiatives within schools to promote entrepreneurship, such as student enterprises and business plan competitions.

An early grasp of economic topics and entrepreneurial education is integral to safeguarding future-skilled workers, especially regarding entrepreneurship, business establishment, and succession planning. Knowledge and interest in entrepreneurship increase the likelihood of business start-ups. Efforts to convey know-how and motivation for setting up businesses and succession should be amplified while streamlining existing initiatives. Enhanced education and awareness of economic dependencies can help cultivate a clearer image of entrepreneurship, fostering a healthier ecosystem for entrepreneurial ventures overall (see Chapter "Securing Skilled Labour: Strengthening Vocational Education – Unlocking Potential"). Universities should more frequently assist spin-offs, ideally in collaboration with economic partners. IHKs, acting as intermediaries, can play a valuable supporting role.

The number of 'senior owners' seeking successors and availing themselves of support from their IHK (German Chamber of Commerce and Industry) has reached record highs. Business offers overwhelmingly exceed buyers' interests within the IHK's operational scope. Many among these would-be sellers face no alternative but closing shop, triggering adverse regional impacts on both employment and vocational education. Public policy must nurture a succession-centric mindset while fostering a conducive entrepreneurial environment. Exemplars by successful individuals (notably female entrepreneurs) matter greatly when cultivating foundational inspirations. Core to encouraging stability lies ensuring tax constructs enable unencumbered asset/ownership transference. Thus, particular acknowledgment heads sections encapsulating 'gift/inheritance seamless facilitation metrics’ (see relevant excerpts highlighting 'redirecting taxation' benchmarks encoded within chapters narrated upon broader fiscal contexts (compare chapter Tax Policy).

The European Union needs a dedicated SME policy that is respected, implemented and improved by all parts of the Commission.

This includes a consistent application of the "Think Small First" principle when drafting EU laws. Additionally, the "SME test" should be mandatorily applied in all impact assessments of the European Commission in order to identify and avoid unnecessary burdens caused by EU regulations for businesses early in the legislative process. It should be taken into account that bureaucracy involves disproportionate costs for SMEs as they have lower administrative resources than larger companies, often the owners handle the administrative effort themselves.

It is crucial to involve SME representatives early in the legislative process, in expert and advisory committees of EU institutions, to adequately consider the experiences and interests of SMEs in policy making. At the same time, concrete measures to reduce current burdens are necessary, which should quickly become noticeable in everyday business operations. One example is the evaluation of regulatory requirements and the reduction of disproportionate reporting obligations (see chapter "Reducing Bureaucratic Burden and Better Lawmaking").

An important function to effectively articulate the perspective of SMEs could be carried out by the SME representative position within the EU Commission. This position should be embedded in the "governance structure" of the Commission in such a way that measures to strengthen the European SME sector can be enforced across various directorates-general of the EU Commission.

When SMEs grow into the category of "250 or more employees," they have a good chance of realizing additional growth potential with greater steps. The EU Commission should significantly increase the thresholds established in 2003, which designate a company as an "SME" – an annual turnover of up to 50 million euros and an annual balance sheet total of up to 43 million euros. According to the majority of companies, the threshold for the number of employees should rise to at least 500.

At a minimum, a "Mid Cap" category should be created for companies with more than 250 employees to allow simplified access to EU innovation programs. The EU Commission should continue to improve its programs for promoting research, development, and innovation in a way that is friendly to SMEs (refer to chapter "Research and Innovation"). Affiliated companies should only be included in the calculation of SME status if they actually benefit from the specific special regulation.

The thresholds for company sizes should also be adjusted in the EU Accounting Directive 2013/34/EU. The financial thresholds have already been raised considering inflation rates. From a German perspective, companies previously defined as "large" in the EU Accounting Directive should be classified as medium-sized enterprises. The "number of employees" threshold for identifying large companies, according to the majority of companies, should be raised to at least 500. This is because even in the category of firms with 250 employees, SMEs can realize growth potential.