About 80% of the businesses on the market will not sell. It is primarily due to owners not realizing the need to plan for the sale of their business.

In Canada, over 1.5 million businesses in the small- (less than 50 employees) and medium-size (50-500 employees) enterprise sectors are owned by Baby Boomers. Ownership planning research indicates that over 40% of these owners plan to leave their businesses within the next five years, and over 70% within the next ten years. (CFIB surveyed)

“71% of small and mid-sized enterprise owners plan to exit their businesses within the next ten years, strongly highlighting the growing importance of enhancing business value. However, the challenge is that few organizations genuinely understand what actions they must take to achieve this goal….”

– Deloitte & Touche –

“The unfortunate reality is that 80% of business owners fail when trying to sell their company. This is an alarming statistic and I hope to serve this as a bit of a wake-up call” says Steve Harvey of Business Finders Canada. “I have met far too many people who think they can wake up one morning, decide to sell their business, and go out and do it. In reality, that does not exactly happen.”

“On the flipside if you PREPARE your business for SALE you have an excellent chance to sell your Business” Exit strategies are something that every investor in a business and business owner looks for. Even if you are running a one person sole proprietorship, you need and Exit Strategy. Industry average in sales of business is less than 20%. Business Finders Canada’s sell through rate is greater than 65%. More than 3x the Industry average!!!

This is a statistic that has held constant for the past three to four decades. It has been studied by numerous organizations, trade associations, publications and independent firms, and regardless of the year, the economic climate, or the source of data, they all return roughly the same statistic: only 20% of businesses listed for sale in any one year will sell.

“In the Okanagan approximately 200 businesses were listed through the Okanagan Mainline Real Estate Board (OMREB) with 32 sales which converts to 16% sell through rate” says Steve Harvey of Business Finders Canada.

It does not mean that they never sell, but they tend to take much longer, with a two-, three-, or four-year process to get the business sold, during which time the owner likely lowers the price considerably. It could be that they were asking too much to begin with. It could also be that there were other factors that harmed the value of the business, and it ended up being worth less than the average business in that industry of a comparable size and position.

Of the businesses that ultimately do sell, about 15% sell to a family member, 15% sell to an insider – a partner or manager, and 50% sell to a third party. The remainder is made up of a variety of other business exit strategies: merging with another company, implementing an employee share ownership plan, or going public.

When a business doesn’t sell, operating the business indefinitely or simply closing the doors may be the only options available. Hardly the exit plan that any owner would desire.

Despite the absolute certainty that every business owner is going to leave his or her business at some point in time – voluntarily or otherwise few Canadian business owners have developed a formal succession plan less than 18% of owners have a written exit plan for leaving their business.

  • 40% of these owners plan to leave their businesses within the next five years, and over 70% within the next ten years
  • About 80% of the businesses on the market will not sell.
  • Less than 18% of owners have a written exit plan for leaving their business
  • The number of businesses sold in Canada is expected to double each year for the next ten years. (Community Futures)

Exit strategies are something that every investor in a business and business owner looks for. But even if you are running a one person sole proprietorship, you need an exit strategy. For you, as for any investor in a business, the questions are the same when it’s time to move on.



  1. LiquidationOne often-overlooked exit strategy is simply to call it quits, close the business doors, and call it a day. (not a great one). If you liquidate, however, any proceeds from the assets must be used to repay creditors. The remainder gets divided among the shareholders-if there are other shareholders. For small businesses, especially those that are dependent on the performance of a single individual, liquidation is sometimes the only option, as there’s really nothing else to sell.


  2. Keep your business in the familyThe dream of many small business owners, keeping your business in the family ensures that your legacy lives on. As an exit strategy, it can also give you the opportunity to groom your own successor and even perhaps give you some continued say in the business. If you’re looking for proceeds to retire this may not be the way out.


  3. Sell your business to employeesSelling your business to your partners or management can be an attractive option to consider. Current employees know the business and have a vested interest in seeing it prosper. As well, customers, suppliers and investors may be reassured by the stability this option offers. Arranging an employee buyout can be a win-win situation as they get an established business they know a great deal about already and you get enthusiastic buyers that want to see your business continue to thrive.


  4. Sell to another businessTargeting another business to purchase your company can be highly advantageous. Businesses buy other businesses for all kinds of reasons, from using a new acquisition as a quick path to expansion through buying out (and getting rid of) the competition. The trick to success with this exit strategy is to target your potential acquirer(s) in advance and position your company accordingly. And of course, convincing your acquirer that your small business is worth what you want for it.


  5. Sell in the open marketSelling a business on the open market is probably the most common way to exit. At a certain point in time, often when he or she is ready to retire, the small business owner puts the business up for sale for a certain price – and hopefully walks away with the amount of money she wanted to get for it. If this is your exit strategy, you should spend some time PREPARING your business for sale, making it as attractive as possible to potential buyers.



Decide first what you want to walk away with and if that is reasonable. If it’s just money, an exit strategy such as selling on the open market or to another business may be the best pick. If your legacy and seeing the small business you built continue are important to you, then family succession or selling to employees might be best for you. Most people who own a business are focused on making it a great success. Few of us spend as much time thinking about winding down the business or transitioning it to someone else.

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