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.

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.