Business sale forecasts: what to prepare in 2026

A business sale is won or lost before the negotiating table. It is determined by the quality of the financial file that reaches the buyer's desk. A serious acquirer, supported by their accountant, lawyer, and bank, will examine your historical accounts and future projections with rigour. Gaps in the forecasts, inconsistencies with the tax returns, or assumptions disconnected from the historical base translate directly into a lower offer, a prolonged due diligence, or a deal that collapses.

This guide covers the key documents to prepare, the restatements to carry out, and the mistakes that most frequently reduce the sale price for French PME owners.

The minimum for a credible sale file: a three-year forecast P&L, a monthly cash-flow plan, an initial financing plan, a three-year financing plan, and a normalised EBITDA (EBE normatif in French accounting terminology) that shows the buyer the business's true recurring earning power.

Most sellers underestimate the lead time needed to produce a solid file. A forecast built three months before going to market cannot demonstrate a coherent trajectory: the assumptions lack historical grounding, and the recent accounts have not yet reflected any structural improvements.

Starting two to three years in advance allows time to stabilise the accounts, reduce dependence on the owner-manager, smooth out exceptional items, and build projections that are genuinely anchored in observable trends. In the files we work on, the best-valued transactions are almost always those where the owner started structuring the dossier twenty-four months before the first conversation with a buyer.

The sale file combines two complementary sets of documents: historical and prospective. Both must tell the same story to be credible.

Historical documents#

Prospective documents#

On a professional services sale we supported, the absence of a monthly cash-flow plan caused the buyer's bank to request a ten-day supplementary review. The delay nearly killed the deal. A complete file prevents these late-stage blockages.

Valuation uses several complementary methods to establish a defensible price range. Understanding them is essential for building forecasts that align with market expectations.

EBITDA multiples are the most common approach for French PME in industry, services, and distribution. The EBE (excédent brut d'exploitation, the French equivalent of EBITDA) is multiplied by a sector-specific coefficient. For a typical PME, this multiple generally ranges between 3x and 7x the normalised EBE — the precise range depends on sector, size, revenue visibility, and the degree of owner dependence.

Revenue multiples or percentage-of-turnover benchmarks are commonly used for business goodwill (fonds de commerce) transactions: retail, restaurants, pharmacies. Sector benchmarks published by the French professional bodies provide a reference, though never a substitute for a case-by-case analysis.

Discounted cash flow (DCF) applies particularly to high-growth companies, SaaS businesses, or projects whose value rests on future projections. It requires especially robust forecasts because every growth or margin assumption directly impacts the valuation output.

Revalued net asset value is relevant for holding companies, real-estate-heavy structures, or businesses whose balance sheet carries significant assets at historic cost.

This is the most important restatement in any sale file, and the one most often poorly prepared by sellers. The normalised EBE (EBITDA) aims to measure the true, recurring operating earning power of the business, stripped of the owner's personal remuneration decisions and one-off items.

The buyer and their advisers will recalculate this figure before any serious negotiation. If you do not do it yourself, they will — and their version is likely to be less favourable than yours.

The main restatements to perform#

Owner-manager remuneration. If the owner draws a salary significantly above or below the market cost of replacing them, the EBE is adjusted to reflect the realistic replacement cost. A below-market salary inflates the apparent EBE; an above-market salary deflates it. Both are corrected.

Non-recurring items. One-off subsidies, exceptional losses or gains, artificially low rent charged by the owner's property company, personal expenses run through the business — all are neutralised to isolate structural operating performance.

Market rent. If the business occupies premises owned by the seller or a related property structure, the rent charged may differ from market level. The normalised EBE applies a market rent, which can meaningfully shift the valuation.

Worked example: calculating the normalised EBE#

A trading PME with the following last-year figures:

• Accounting EBE: €280,000
• Owner salary: €40,000 (market cost of a replacement sales director: €90,000)
• Rent paid to the owner's SCI: €12,000/year (market rent: €30,000)
• Exceptional bonus linked to a one-off contract: €25,000

Restatements:

• Remuneration adjustment: –€50,000
• Market rent adjustment: –€18,000
• Non-recurring bonus: –€25,000

Normalised EBE = €280,000 – €50,000 – €18,000 – €25,000 = €187,000

The gap between the accounting EBE (€280,000) and the normalised figure (€187,000) is €93,000. At a 5x multiple, that represents a €465,000 difference in valuation. The buyer's accountant will run this calculation as a matter of course. Running it yourself first, with your own expert-comptable, is the single most effective preparation step.

A credible forecast starts from the real accounts, the existing margins, and the actual development intentions — not from a blank page.

Root everything in the historical base. Every future assumption must be explained relative to an observable trend, not a pure ambition.

Explain each growth assumption. A 10% revenue increase implies more prospecting, a new channel, or additional headcount. The corresponding cost lines must appear in the projections.

Integrate investments and hires. A plan that projects growth without the resources to support it will be challenged immediately by any professional buyer.

Stress-test the plan. What happens if growth is half what you project? Does cash remain positive? Can the business service the acquisition debt?

Distinguish proven from possible. Signed contracts and recurring revenues are solid ground. Pipeline opportunities should be labelled as such.

The choice of transaction structure and the seller's personal tax situation can significantly alter the net proceeds.

Flat-tax rate (PFU) of 31.4% on share sale gains. Since 1 January 2026, gains on shares in French IS-taxable companies are taxed at 31.4% under the PFU (12.8% income tax + 17.2% social contributions + 1.4% autonomy contribution). No holding-period taper relief applies under the standard regime.

Retirement departure allowance: €500,000 (Article 150-0 D ter CGI). Extended to 31 December 2031, this relief allows an owner-manager selling on retirement to deduct a flat €500,000 from the net taxable gain. Key conditions: management functions exercised for at least five years, cessation within two years of the sale, and sale to an unrelated third party. It cannot be combined with holding-period taper relief.

Professional activity exemptions. Article 151 septies CGI provides full exemption where receipts are below €250,000 (sales of goods) or €90,000 (services). Article 238 quindecies CGI provides full exemption below €500,000 of transaction value, tapering to €1,000,000.

Vendor loan and tax spreading (Article 1681 F CGI). Where the sale includes a vendor loan, the seller can request that income tax on the gain be spread over the repayment schedule (conditions: fewer than 50 employees, value ≤ €10 million).

The seller's tax exposure requires personalised review by an expert-comptable and, where relevant, a tax lawyer, well in advance of any signing.

The garantie d'actif et de passif (GAP) — the French equivalent of a representations and warranties clause — is the central protection mechanism in the sale protocol. It covers the buyer against undisclosed liabilities or overstated assets that materialise after closing.

Forecasts matter here because if post-sale results diverge sharply from the projections the seller presented during negotiations, the buyer will examine whether the variance stems from changed conditions or from a presentation that was misleading. Overly optimistic forecasts create exposure under the contractual representations embedded in the protocol.

For a detailed look at price adjustment mechanisms and warranty structures, see our article on price adjustment — net debt and normalised working capital and our guide to the sale protocol in a business transfer.

A well-organised data-room accelerates the due diligence, reduces back-and-forth, and signals professionalism. The financial documents form its core:

• Last three complete statutory accounts with full annexes
• Monthly management accounts and quarterly situations
• Three-year forecasts with the written assumptions note
• Historical and projected cash-flow statements
• Net debt schedule and normalised working-capital calculation
• Loan amortisation tables for all outstanding borrowings
• Finance lease schedules with remaining balances

For the full data-room structure including legal, HR, and commercial documents, see our article on organising your sale data-room.

The buyer's bank asks one question: can the business service the acquisition debt without compromising its operations? It will calculate a debt-service coverage ratio (available cash flow divided by annual repayments). Most lenders require a ratio of at least 1.2 to 1.3.

The buyer's advisers will conduct a detailed financial due diligence that confronts your forecasts with the historical accounts. Red flags: unsubstantiated growth assumptions, margins compressing over three years without explanation, cash not tracking the P&L, or an abnormal rise in trade receivables.

• Last three statutory accounts and tax returns complete and consistent
• Normalised EBE calculated with documented restatements
• Monthly cash-flow plan covering at least twelve months
• Three-year forecasts built on written, explained assumptions
• Net debt and normalised working capital both quantified
• Data-room organised with documents up to date
• Seller tax position reviewed (PFU 31.4%, available exemptions, vendor-loan option)
• Owner dependence assessed and, where possible, reduced
• Specialist advisers engaged (expert-comptable, lawyer, mandataire)

Up to date as at 2026-06-14. This article is for information only and does not replace personalised professional advice. For your specific situation, consult a qualified expert-comptable registered with the Ordre des Experts-Comptables.