How to prepare to sell your business in Canada

Start with the decision behind the sale.

Before asking who might buy the business, write down what you want the sale to change. Is the aim to retire, release time, take on a different role or move into a new venture? The answer helps you assess timing and the amount of involvement you might accept after closing.

Separate your priorities into what is essential, what is preferred and what you are willing to discuss. Price matters, but so can certainty, the team’s future, your name on the business and the length of a handover.

Make the business understandable to someone new.

Prepare a short description of what the company sells, who buys it and how delivery works. Then list the decisions you personally make in a normal week. This often reveals information a buyer will need that does not appear in financial statements.

• Who wins work and maintains the main customer relationships?
• Which responsibilities depend on the owner being available?
• What would a new owner need to learn in their first month?

Organise the evidence before the marketing.

BDC’s guide to selling a business recommends preparation with appropriate advisors and organised financial and business records. It also distinguishes a business valuation from the price eventually negotiated in a transaction.

Build an index of the records you hold and identify gaps with your accountant and lawyer. You do not need to place sensitive information into a public listing or an initial inquiry form. Decide how it will be reviewed and shared at the appropriate stage.

Decide how buyers will learn about the opportunity.

A confidential introduction needs enough detail to be useful without unnecessarily identifying the company. Discuss the description, screening process and sequence of disclosures before marketing begins.

Think through who will answer questions, where documents will be organised and how interruptions to the business will be managed. A sale process should have an owner on your side as well as a prospective owner on the buyer’s side.

Set the transaction boundary before discussing a price.

Write down which operating companies, assets, properties and liabilities are part of the discussion. Identify related-party premises, equipment leases and any assets you intend to retain. A buyer needs to understand what it will control and what it will need to lease, replace or obtain consent to use.

The preparation questions in this guide are relevant to owners considering businesses valued at approximately CAD 5–50 million. That describes business value, not an annual revenue requirement or a promise about what your company will sell for. Owners outside the cities listed on our website are welcome to start a conversation.

• Explore asset and share sale questions
• Use the sale-readiness checklist

Build an earnings and working-capital evidence pack.

Ask your accountant to reconcile monthly management results with annual financial statements and explain material movements. Keep a separate schedule for proposed earnings adjustments, with the original ledger entry, supporting record, reason and replacement cost. Do not quietly rewrite the historical results.

Prepare receivables, inventory and payables schedules across the seasonal cycle. Customer deposits, deferred revenue, unbilled work and freight commitments may need separate analysis. The closing date and the agreement's definitions determine which balances matter; a single year-end balance is not a universal working-capital target.

• Document supported EBITDA adjustments

Choose how to respond to buyers and control disclosure.

Decide who may speak for the seller, how prospective buyers will be screened and what each disclosure stage requires. A direct approach can be worth investigating without granting exclusivity or sending identifiable customer records. Record the buyer's identity, funding explanation, decision-makers and proposed timetable.

Use an anonymized overview for early discussions, then a controlled evidence package as the process advances. Your lawyer should review confidentiality commitments and any letter of intent before you sign. BDC explains that these documents shape negotiations and can carry legal weight; the label alone does not settle their effect.

• A buyer approached me: first decisions
• Plan confidential disclosure

Compare the whole offer and prepare for verification.

Put offers on a common basis: assets or shares included, payment at closing, deferred consideration, conditions, working-capital treatment, liabilities and your continuing obligations. Ask advisers to distinguish headline price from the amount and timing of money you may actually receive.

During due diligence, assign an owner and response date to each request. Reconcile answers across finance, contracts and operations. Keep a record of open issues and agreed changes so the sale agreement and handover plan reflect the business the buyer has reviewed.

• Compare offers using a structured worksheet
• Prepare the due-diligence index

Plan closing and the first operating day.

Prepare a responsibility list for banking, payroll, premises, suppliers, system access, customer communication and management decisions. Identify approvals and third-party consents for specialist review; do not assume a contract, licence or qualification transfers with ownership.

Tax planning and transaction structure need advice specific to the owners and business. CRA's selling-a-business page identifies tax and account matters that can arise. Use it as a starting reference, then have your accountant and lawyer determine the applicable treatment and filings before commitments are made.

Take a first step you can evaluate.

An initial conversation should leave you clearer about the work involved. Ask about scope, fees, communication, buyer assessment and the responsibilities that remain with you and your other advisors.

You can start while you are still deciding whether to sell. A useful next step may be a preparation plan rather than an immediate listing. The aim is to make the decision with better information and a realistic view of the business you are offering.