What a buyer looks at, and what you haven't prepared

Around 370,000 French mid-sized companies are likely to change hands by 2030, according to Bpifrance Le Lab. The number of sales actually completed runs at about 37,000 a year. The gap is not only a shortage of buyers: a large share of these businesses is in no state to be bought.

The more telling figure lies elsewhere. Where a sale is more than a year away, seven in ten leaders have not started preparing, when a smooth process takes twelve to eighteen months. In the meantime, many of them cut back on investment in anticipation of the sale, and make the business less attractive at precisely the moment they want to sell it.

The six things a buyer examines

• Dependence on the owner. What happens if you leave tomorrow? If the answer is “everything stops”, the business is worth less, and sometimes does not sell at all.
• Everything that exists nowhere in writing. The knack, the customer relationships, the informal arrangements with suppliers. Know-how that isn't documented cannot be handed over, so it does not get paid for.
• How reliable the numbers are. Reporting rebuilt by hand casts doubt on everything else, including the parts that are perfectly solid.
• Delegation. A leadership team that decides is an asset. A team that carries out decisions taken elsewhere is not.
• Customer concentration. Three clients making up half of revenue turn a fine business into a risky proposition.
• The digital foundations. Tools that do not talk to each other tell a buyer there is an investment coming, and they will take it off the price.

What to start, and when

None of this is settled in three months. But none of it calls for a major programme either.

• Write down what isn't written, beginning with the critical processes and the key relationships.
• Delegate for real, which means accepting that some decisions will be taken without you, and that they will sometimes differ from the ones you would have taken.
• Make a dozen figures reliable, no more, and name someone accountable for each of them.
• Keep investing. A business that has stopped developing is obvious at a glance.

The right question is not “what is my company worth”. It is this: if I put it on the market in eighteen months, what would make a buyer walk away? And it needs asking long before you want to sell.