In the first months of the coronavirus pandemic, when mandatory lockdowns turned Canada’s largest cities into ghost towns, small business owners feared the worst.
As the year comes to a close, however, the situation has come to seem a little less dire. While plenty of businesses have had to close their doors for good, others have found ways to adapt to the new reality through delivery, curbside pickup, and other innovations that make it easy for customers to continue patronizing them in safe and responsible ways.
This has brought with it a certain amount of clarity. In some cases, the coronavirus shock has even provided business owners with an opportunity to have a realistic conversation about where they see themselves in five years.
This has led some Canadian business owners to start thinking about whether or not 2021 is the right time to sell to younger entrepreneurs who have the energy and vision to face the challenges of the contemporary market.
How to Sell a Business in Canada
Selling a small business in Canada is a process that involves many steps. Business sales are regulated by the federal and provincial governments, and even if you already know the person you’re selling to, it’s a lot harder than simply handing over a set of keys and cashing a cheque — and if you don’t already have a buyer in mind, the process is even more complex.
In most cases, before a business sale can be closed, the following steps will be necessary:
- Strategic planning to determine the right time to sell
- Valuation of the company to determine current market value
- Maximizing business value to improve leverage
- Finding potential purchasers
- Preparing confidential information pertaining to the sale
- Structuring, pricing and negotiating the sale
To get through these steps requires a significant amount of professional and legal help which many small businesses simply don’t have in-house.
The Crucial Role of Business Brokers
Given all the complexities involved in selling a company, it’s no surprise that many business owners opt to work with Canadian business brokers who can help them navigate this complex process and arrive at a fair deal.
For example, brokerages like Beacon Mergers & Acquisitions specialize in divestiture, so if you want to sell your business in Toronto they can help you put it up on the market and negotiate with interested buyers.
Not only do the play a crucial role in connecting you with potential buyers in a confidential way, they can also screen buyers based on your own criteria, so you can be confident that you’re selling to an acceptable individual or business.
Even before the crisis hit, business sales were up in Canada according to the Globe and Mail. As Baby Boomers prepare for retirement and Millennials start eyeing opportunities to invest, it’s not surprising that successful companies are changing hands to make way for a new generation of entrepreneurs.
But given the complexities of the process, it’s important for those interested in selling to get the right advice before they start the process. If you’re considering divestiture, make sure to get in touch with Toronto business brokers who can help you negotiate the right deal.
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