What a buyer values goes far beyond revenue: team autonomy, clear financials and positioning. All of these are key factors that require several years of preparation.
By 2030, 370,000 French companies will need to change hands. At the current rate of business transfers, only one in three will find a buyer, and many business owners are slow to prepare for the process. Alexandre Folman, founding partner of Crescendo Finance, explains what is holding them back and why a well-prepared sale can make all the difference in the eyes of a buyer.
According to Bpifrance, France records just over 37,000 business transfers a year, far below the pace required to accommodate the wave of departures expected by 2030. Government initiatives are multiplying: the Papin Pact, announced in September to facilitate employee buyouts, joins existing measures such as the Dutreil Pact and the sustainability fund. In practice, however, the main difficulty remains business owners’ lack of preparation.
Why do business owners prepare so little?
The first reason is that day-to-day operations take up all their time. An SME owner is focused on organic growth, managing sales, recruitment, cash flow, customer requests, business development and more. Preparing for a sale is simply not one of their immediate priorities. Moreover, it is such a vast undertaking that it can be difficult to know where to begin.
There is also the emotional attachment to the company. Preparing to sell means accepting the idea of life outside the business you have built, sometimes over the course of your entire career. Business succession specialists even describe this as a genuine process of “mourning”. Business owners rarely talk about it, but this psychological barrier often results in avoidance: they have their company valued and listen to offers without making any changes to the way the business is organised.
Many also underestimate the gap between the value they place on their company and the value a buyer sees in it. They often believe that valuation depends primarily on revenue and profitability. These factors matter, of course, but buyers look much further ahead: they assess whether the organisation is clearly structured, whether the management team can operate without the founder, whether the financial statements are easy to understand, whether customer relationships depend solely on the business owner, whether the company can attract strong talent, and how far it has progressed in integrating artificial intelligence. Most of these criteria are not purely financial, but they can still be measured and have a significant impact on the price a buyer is willing to pay. Optimising them cannot be left until the last minute.
Finally, preparation is often fragmented. The accountant, lawyer, notary and banker each work within their own area of expertise, but no one takes on the role of conductor, with an overall view of the process and the ability to determine whether the company is truly ready to be taken over.
Four fundamental areas to address
The first is wealth and estate planning. Selling a company is also a major event in the business owner’s personal life, and several tax mechanisms, such as the Dutreil Pact, contributing shares to a holding company or gifting shares before a sale, are only effective if they are put in place well before the transaction.
The second is people. A company that depends entirely on its founder is harder to sell. A buyer wants to be able to rely on trained managers who are ready to take over, a clear organisational chart and well-defined roles. This is often the longest part of the process: teams need time to develop their skills before responsibilities can gradually be handed over to them.
The third is financial. Clearly presented accounts, profitability broken down by business activity and controlled costs allow a buyer to understand the company without the owner having to explain everything. Grey areas, whether in the accounts or in contracts, come at a cost during negotiations, either through a lower purchase price or additional guarantees required from the seller.
The fourth concerns the company’s positioning. What the company offers its customers, its place in the market, its image and its employer brand must all be clearly defined and consistent with one another. Marketing and communication can then help clarify the offering or modernise an outdated image, which can also have an impact on recruitment. When carried out two or three years before the sale, this work has enough time to deliver tangible results that a buyer can assess.
Carry out an assessment well in advance
The best way to begin this process is to commission an expert assessment, ideally three to five years before the sale. Conducted from an external perspective, independently of potential buyers, it examines the company in depth: the strength of its organisation, the autonomy of its teams, the clarity of its financial statements and its market positioning. This makes it possible to prioritise actions and establish a timeline suited to the company’s circumstances.
Business owners who undertake this work generally enter negotiations from a position of strength. They can encourage competition between offers and, above all, give themselves the luxury of choosing their buyer. This last point is particularly important for founders who do not want to see what they have built disappear and who want their employees to be able to continue their journey within the company.