Ready To Retire and Sell Your Business? You’re Not Alone.

According to research by the BDC, roughly 40% of Canadian business owners are likely to retire within the next 3 years. Two of the main questions faced by these owners are: How can I prepare my business for sale? And what kind of buyer will be best for my business?

There are many steps you can take to prepare your business for sale. To begin with, buyers will look for clarity in your financial statements. Most small and medium-sized businesses do their books in-house, which can cause them to vary from mainstream accounting standards. Any efforts you can take to

‘clean up’ your financial statements to make them more professional and easy to read will be appreciated by potential buyers.

You can also prepare by making your business less reliant on you as an owner. Training employees to take over more of your managerial responsibilities is a great way to position your company for a successful sale. That way, there is less risk of customers leaving the business after you stop being personally involved. There is also the question of what kind of buyer you want for your business. Investment firms like private equity funds may have deep pockets, but they often employ aggressive strategies such as laying off staff and attempting to ‘flip’ the business within a few years of the purchase. Make sure you understand whether the buyer will act in a way that is respectful of your legacy, your customers, and your staff.