Succession: eighteen months is rarely enough. Here's why

A massive, underperforming market

According to Bpifrance Le Lab, 370,000 French companies could be sold by 2030. At the current pace of transactions (source: DGE), only 130,000 of them will actually find a buyer over that period. The potential is nearly three times what is observably happening.

It isn't a problem of buyer supply, but a problem of files. Too few companies reach the market in a condition that allows a sale on good terms. And above all, too few founders are educated for this kind of operation or sufficiently supported.

In 2025, the Direction générale des entreprises (DGE) counts roughly 37,000 completed succession transactions per year. The number is stable, but it hides a concerning reality: most failed processes are never documented, and most founders who give up on selling are never counted.

The forced trigger, enemy of value

The typical profile of a founder who enters a sale process without sufficient preparation is well documented. Intentions to transfer peak between 60 and 64 years old (69% of founders considering a sale according to sector data). But intention isn't preparation.

In most cases, the decision to sell is preceded by an unwanted event: retirement, fatigue, a health issue, a partner dispute, the loss of a major client, or simple exhaustion after years of leadership. These triggers all share one thing: they drastically shrink the time available for serious preparation, or force the decision outright.

A well-structured succession is prepared 18 to 36 months in advance, according to the CRA (Cédants et Repreneurs d'Affaires) and seasoned market practitioners. Below 12 months, options are severely constrained and the negotiating position weakened.

What buyers see, and what sellers underestimate

A professional buyer reads a data room with an eye calibrated for risk. What they try to quantify before submitting an offer is the list of reasons value could evaporate after the transaction. Here's what they find most often.

Operational dependency on the CEO. This is the first point of attention. If the client portfolio rests on the founder's personal relationships, if strategic and commercial decisions are centralized on one person, if the management team can't run the company autonomously, perceived value drops mechanically. A financial buyer will explicitly discount that risk. An individual buyer will live it as an anxiety that can block the decision.

A client dependency concentrated 80-90% on the CEO's personal relationships can make a company nearly unsellable, even with solid financials.

The untested valuation gap. The founder usually has a sense of the company's value, often built on sector comparables, informal conversations, or a wealth projection. That value has almost never been tested against a real buyer in real negotiation. When the first serious number arrives, it's often 20 to 40% below the seller's expectations. That surprise creates frictions that can compromise the entire process.

Late tax structuring. The tax optimization tools available at the time of a sale (apport-cession, Dutreil pact, long-term capital gains regime, holding structures) are powerful but require activation well in advance. A restructuring done in the last six months of a process is often partial, and leaves net value on the table irreversibly.

The absence of a post-sale personal plan. This point is systematically underestimated by founders themselves, yet well documented by succession specialists. A seller who hasn't mentally built their life after the sale will tend to slow the process, multiply conditions, reformulate requirements already negotiated. These blockages are rarely conscious. They are regular.

The five workstreams of serious preparation

Effective preparation over a 2 to 3 year horizon must cover five dimensions simultaneously.

1. Reduce operational dependency. That means developing the skills and responsibility of the N-1 layer, formalizing key processes, diversifying the client portfolio, and documenting implicit know-how. This work takes time and cannot be simulated in a data room.

2. Build a readable financial trajectory. A buyer reasons over 3 years of historical results and a 2-3 year projection. The quality of normalized EBITDA, revenue recurrence, working capital management, and investment discipline all condition the valuation. These signals are built over several fiscal years.

3. Optimize the legal and tax structure. Interposing a holding, executing an apport-cession, structuring real estate assets separately from the operating asset, preparing a Dutreil pact for family succession: each decision must be made with a multi-year horizon to bear fruit. This workstream opens with a specialized tax advisor, not in the urgency of a closing.

4. Build a complete, coherent data room. The data room isn't a set of documents thrown together in a hurry. It's an instrument of conviction. A well-built file lets you answer 80% of a buyer's questions before they're asked, control the pace of due diligence, and avoid being on the defensive about issues that could have been anticipated.

5. Clarify your personal plan. This includes the wealth question (what's my net need after the sale, how will I manage the proceeds?) and the meaning question (what am I going to do with the next 10 years?). This work is often the hardest for a founder who built their identity around their company. Yet it's what conditions the seller's psychological solidity in negotiation.

The market reality in 2025

The French SME succession market remains active. According to the DGE, the 3-year survival rate of transferred companies reaches 82%, higher than the survival rate of companies created from scratch. Succession is a takeover model with solid fundamentals.

What's underperforming isn't the market. It's the average preparation level of sellers who arrive in process. Well-prepared companies find a buyer, often at a valuation close to their expectations. The others suffer either a significant discount or a process failure.

The preparation window is precisely what most founders don't pilot, for lack of a senior counterpart able to walk with them on the full trajectory, not just the transaction itself.

What Seichō Partners does concretely

Seichō Partners works alongside founder-shareholders of small and mid-sized companies on their capital trajectory. Succession is one of our core engagements.

Our intervention sits upstream of sale processes, on a 12 to 36 month horizon before the transaction. It covers the diagnostic of the real situation (value, dependencies, structural risks), the construction of a prioritized action plan, and the support on execution up to going to market.

We are not a transaction intermediary. We are the independent strategic partner, at the heart of execution, who helps the founder see their situation clearly, decide rigorously, and arrive in process in the best possible position.

If you're considering a succession in the next two to five years, the question isn't "is it the right time?". The question is "have I started preparing what I won't be able to fix in 18 months?"