Tag Archives: Selling Your Business

Seller Case Study – Mechanic Shop

A mechanic shop with a very strong following was finding it difficult to get journeyman mechanics. Both brothers wanted to keep the shop a few more years but they weren’t good at attracting employees, so they called Business Finders Canada.

This shop had very strong profits. But the money they needed for the two families was not there initially. Once we did a little digging, we saw a patent the brothers had on some suspension components that we could package in to make it more valuable. We also found the right buyer who they both could work with for a few more years – so they both ended up being very happy. Selling a small business? Learn more about the Lifetime Capital Gains Exemption.

Business Finders Canada has over 1100 successful transactions. We are committed to helping people who want to sell their business find the right buyer. Contact Us today.

Selling Your Business – Navigating Challenges

Expert Guidance by Business Finders Canada – You face unique challenges if you are selling your business. In this blog we demystify these challenges, offering strategic solutions to facilitate a smooth and rewarding business sale, setting the stage for a successful retirement.

  1. Valuation: The Key to a Fair Sale
    Correctly valuing your business is a critical first step. Owners often grapple with emotional biases or a lack of market knowledge, leading to unrealistic valuations.

Overcoming Valuation Hurdles

  • Engage a professional for an unbiased business valuation, beyond an accountant’s perspective. This ensures an accurate market value and asking price.
  • An objective valuation is the cornerstone of fair negotiations, leading to informed offers and viable transaction terms. Business Finders Canada collaborates with third-party valuation experts to guarantee this accuracy.

2. Financial Preparedness: A Critical Component
Many owners overlook the importance of personal financial planning in the sale process.

Steps to Financial Readiness

  • Keep financial records, including tax returns, profit and loss statements, balance sheets, and asset lists, up-to-date and transparent.
  • Adopt a comprehensive approach covering valuation, debt management, sale-related expenses, tax planning, and post-sale strategy.

3. Identifying the Right Buyer: Beyond Finances
Finding a buyer who aligns with your business vision and values is crucial for its continued success.

Securing the Ideal Match

  • Implement confidentiality agreements (NDAs) to safeguard discussions.
  • Vet buyers for qualifications, financial capability, and compatibility with the business’s ethos.
  • Use insightful dialogues to understand buyer intentions, ensuring alignment with your business’s potential.

4. Negotiation & Deal Structuring: Crafting a Win-Win Scenario
Navigating complex negotiations and deal structures demands expertise.

Navigating Deal Dynamics

  • Employ seasoned advisors to leverage negotiation tactics and deal structuring knowledge.
  • Explore structuring options like earn-outs, seller financing, or equity stakes, and tailoring solutions to attract buyers.

5. Confidentiality: Protecting Your Business Interests
Maintaining strict confidentiality is vital to prevent operational disruptions.

Ensuring Information Security

  • Require NDAs from all negotiation participants.
  • Limit sensitive information sharing to serious, qualified buyers.
  • Gradually release information, building trust through the negotiation process.

Conclusion: Charting a Path to Retirement Success

The journey to successfully selling your business is paved with strategic planning and expert support. At Business Finders Canada, we stand ready to guide Canadian entrepreneurs through this pivotal transition. Embrace preparedness, seek expert advice, and emotional readiness are your pillars for a successful business sale and a rewarding retirement. Navigate selling your business with confidence and precision. Connect with Business Finders Canada for comprehensive support in every step of your journey. Learn more about what your business might be worth with our free business valuation calculator.

Seller Case Study 91

A cross-Canada search found a manager the owners liked so they could step away from the business. After buying a vacation property in the Kootenays their new manager had conflicts with several key employees and many left the company. Business Finders Canada was contacted.

After getting key roles filled, we also had to get the back end sorted. 

Cash flow was great and the business had several systems that made it more attractive to more buyers. We found a retired couple that wanted to live in the Okanagan and it was a win-win. Now that the sellers no longer have a business to worry about, life just got a whole lot easier.

Seller Case Study 82

The founder of a cabinet company passed away unexpectedly. His family scrambled to run the business the same way their father had.

After two years of missed budgets and employee turnover, they tried to sell the business themselves. Frustrated with the process of finding a suitable buyer they reached out to Business Finders Canada.

Our first step was solidifying the business itself. Working towards set systems so it would be more attractive to qualified buyers.

Once we achieved stability, we were able to market the business to its full value. We follow a confidential process that allows your business to be seen by only qualified buyers. Our team works every day with sellers and buyers of businesses. Let us do the work behind the scenes so you can continue to run your business. We are a professional team that gets professional results.   

Seller Case Study 77

When the father of a flooring store passed away his son was called upon to run the company. He kept the company’s cash flow positive until he wanted out. After unsuccessful attempts to sell the business to other flooring company owners, he called Business Finders Canada.

He had several key lines and solid blue chip customers, so that brought a higher price. He was the face of the business so we had to negotiate a longer-term transitional plan than normal. Once the business was prepared to SELL, it opened the door to more buyers. If you hire us we look at everything to ensure we get the highest market value for your business. It’s all we do.

Seller Case Study 50

The owners of a retail store got exciting news. They were going to become grandparents. With solid financials and a building to sell, they had a lot to offer a buyer. Retail was their profession not brokering the sale of their business, so they called Business Finders Canada. 

This business had a very strong EBITA: Earnings Before Interest, Taxes, and Amortization. The building also added great value. Especially when long-term leases on the property were secured. We also discovered the zoning was favorable for future expansion. We helped the owners sell their business and now they can relax, travel, and enjoy their grandkids.

Seller Case Study 42

The owner of a service company that wanted to sell his business had a problem. The owner/operator’s wife was diagnosed with cancer and was facing a long recovery. He knew he couldn’t handle selling the business and his wife’s recovery, so he called Business Finders Canada.

We try to give the seller as many details as we can. In this case, they asked for little communication as they wanted privacy. We only called when we found the right buyer. Keep in mind we had a conversation with him only 24 months previous. So he knew what he had to do to get the business ready for sale. A clean, fast transition was what he wanted and we were able to get it for him.

Seller Case Study 37

After several years of running a cash-flow-positive business, the owner of an autobody collision repair center decided to sell.

Due to the highly specialized nature of the business, he couldn’t find a suitable buyer. Frustrated, he reached out to Business Finders Canada.

Finding a qualified buyer for the business was a challenge. We shored up the systems in the business to be more turn-key. Once the business had been prepared to SELL, the door opened for more buyers. If you work with us we look at everything to ensure the highest market value for your business. It’s all we do.

Seller Case Study 22

A manufacturer, who had been in business for sixteen years, decided to sell his business following a minor health scare. He contacted several colleagues in his field over a year. During that time, two deals fell through.

This cost him time, a key employee, and energy spent chasing down financials for prospective buyers. Exasperated, he reached out to Business Finders Canada.

By making his business more attractive to sell, we were able to close a deal in less than five months. Increasingly, businesses understand that hiring a professional can yield professional results. We follow a confidential process that allows your business to be seen only by qualified buyers. This saves you the headache of trying to chase down dream deals and lets you continue running your business. The result is more money in your pocket.

Selling Your Business – Preparation is Key

Selling Your Business – Getting Ready

By preparing your business for sale, you have an 80% higher chance of selling it!

If you are like most business owners, you have some housekeeping to do before your business is ready to sell.  There is likely a list of things you will need to gather, organize, fix, or even create to show your business in the best light.  

We know businesses that sell faster and for more money are the ones that are the most prepared to be presented to the business buyer marketplace and have owners that are calm and collected throughout the process.   

Gather Your Critical Business Information

No serious buyer will make an offer on your business without knowing the ins and outs of the business.  This includes getting to know sensitive and confidential information regarding your business.  Never discount the value of first impressions, including how your business looks and feels to prospective buyers. 

Does it look clean?   Organized?   Well managed?  

Will the buyer be pleasantly surprised by what they see?  

You’ll work with one of our certified business brokers to consider the curb appeal of your business and work toward creating action steps to improve the marketability of your business to potential buyers.

Prepare for Negotiating the Deal

The majority of business deals never arrive at the closing table because the buyers and/or sellers get emotional, take negotiations too personally, and become needlessly contentious in the negotiations. Another key reason that negotiations break down is that sellers encounter unexpected financial surprises. We help you understand the deal from a buyer’s perspective; prepare you for staying objective through deal negotiations, and reduce the risk of allowing emotions to drive your decision-making. 

Remember that your goal is to sell, and not to beat the buyer at a negotiation game. You and the buyer should lay the foundation as a team to get to completion.

Don’t allow yourself to get bogged down in disputes with your buyer. Don’t allow your ego to distract you from satisfying your underlying need to sell. Work with your buyer as an ally. Generate a variety of solutions before deciding what to do about any particular problem. Try to resolve the toughest issues with objective criteria, independent standards, and market norms.

Prepare for the Due Diligence Process

There will be a period of inspection by a prospective buyer as a condition of the contract going forward with the deal called the due diligence period.  This might be anywhere from a 15 to 45-day window of time for the buyer to ask a seemingly endless number of questions and request a variety of documents for inspection by the buyer and her or his professional advisors.  If you have previously taken the time to gather your critical business information, the due diligence stage should go smoothly.  Thorough preparation is a must.  Common representations and warranties that a seller may be required to make as a  condition of the sale include confirmation that: Financial statements are complete and accurate, taxes are paid in full, and all contracts are in good standing and there are no environmental liabilities.

Some common errors that can occur in the process of business sales include unreasonable price expectations, a business that is unprepared for sale, poor market timing, and declining financials.

Operate It Like You Are Going to Keep It

During the entire sale process, you should always operate the business as if you were going to keep it forever.  Nothing drives the price of a business down than year-to-date financials that show a decline in revenues and profits. There is justification for an asking price for a business that continues to grow and is looking to the future. It is critical to the sale of your business that you focus on keeping your business healthy. To learn more about different scenarios that might apply to selling your business, click here. Learn more about what is happening in commercial real estate by clicking here.