Business Succession: Why Three Years Is the Real Minimum

There is a conversation I have had too many times to still find it surprising. A sixty-three-year-old owner-manager, a good forty-person business, respectable margins. He tells me: “I’m selling in two years.” I ask him what he has prepared. Silence.

In a succession, two years is not a horizon. It is already the countdown.

The gap between the stock and the flow

The French figures are well known to professionals and ignored by almost everyone else. Bpifrance Le Lab puts the number of businesses to be handed over by 2030 at 370,000. Against that, France records of the order of 26,000 successions a year. Do the division: the country transfers roughly three times fewer businesses than it should.

This is not a shortage of buyers. The candidates exist — executives changing course, groups growing by acquisition, small-cap funds, family successors. It is a problem of businesses that cannot be sold.

An unsellable business is not a business in trouble. More often than not it is a perfectly healthy company carrying one or more of these defects:

• the owner is the only person who holds the client relationships;
• there is no second line of management;
• the accounts mix personal wealth with operating assets;
• the property sits inside the company;
• no client contract is written down, or none survives a change of shareholder;
• nobody has ever set out the strategy anywhere other than in the boss's head.

Every one of these can be fixed. None of them can be fixed in six months.

What the Belgian market tells us

The Walloon market is a valuable observatory, because it is measured in fine detail. Wallonie Entreprendre recorded 544 completed successions in 2025, safeguarding around 7,100 jobs. Three lessons come out of it, and I find all three among my French clients.

First lesson: these are small deals. 41% of transactions were worth less than one million euros, 79% less than five million. This is not the M&A of the business press. This is the real economy — workshops, professional practices, regional distributors.

Second lesson: valuations are sober. The average multiple observed comes out at around 5.6 times EBITDA. That is a long way below what many owners have in mind, usually fed by comparables drawn from far larger deals. In my experience, the gap between the dreamed-of price and the market price is the single biggest cause of failed successions — ahead of tax, even.

Third lesson: the price is rarely paid in cash. A quarter of deals included vendor financing, averaging close to a quarter of the price. 17% provided for an earn-out linked to future performance. Put differently: in one succession out of three, the seller remains exposed to the fate of his company after signing. That changes entirely how you should choose your buyer.

Finally, retirement is the leading reason for selling — around 34% of cases. And only 11% of deals are family successions. The myth of the child who takes over has largely dissolved.

Three years, not two

When an owner asks me when to start, my answer is always the same: three years before the date you want to have signed. Here is why.

Year 1 — make yourself replaceable. The single objective of this year is that the business should run without you for six weeks. Hand over the key client relationships. Appoint one or two managers who genuinely decide things. Write down what is written nowhere. It is the hardest year, because it asks the owner to give up what has been his identity for twenty years.

Year 2 — clean up and get objective. Take the property out if that makes sense. Formalise the contracts. Tidy up the shareholder current accounts. Commission an independent valuation — not to set the price, but to know the ground you are standing on. Many owners discover at this point the distance between their number and the market's, and it is infinitely better to discover it two years out than three weeks before a letter of intent.

Year 3 — search, choose, negotiate. Build the file, test the market, meet candidates. Allow nine to eighteen months between the first serious contact and signature. And plan for a handover period afterwards: most buyers ask for it, most sellers underestimate it.

The most neglected point: the human exit

Technically, a succession is an exercise that dozens of professionals know how to run. Humanly, almost nobody prepares the seller for what is coming.

I have watched perfectly structured deals fail in the last three metres because the owner, at the moment of signing, realised he had nothing on the other side. No project, no role, no reason to get up. The price then becomes a pretext: demands go back up, closed points are reopened, the buyer is suddenly found wanting. This is not bad faith. It is grief dressed up as negotiation.

Asking the question early — “what will you do on the Monday after?” — does more for the success of a succession than three rounds of accounting adjustments.

What I actually do

I get involved on this subject at two moments. Upstream, as adviser to the owner, to build and run the three-year plan: making the business sellable, building the second line, putting an objective figure on value. And during the process, as a mediator, when the relationship between seller and buyer tightens — which happens in one deal out of two, and is almost never really about price.

If you are three years from your horizon, this is the right moment to talk. If you are one year out, it is urgent. If you have already signed a letter of intent and the conversation is hardening, it can still be recovered — but you need to move quickly.

---

Sources: Bpifrance Le Lab — Transmission en France : un marché de 370 000 entreprises d’ici 2030 · Wallonie Entreprendre — Transmission d’entreprise en Wallonie, bilan 2025