Selling a business doesn’t have to be stressful — get clear, step-by-step guidance on valuation, tax optimization and exit planning for Canadian entrepreneurs.

1. Decide why you’re selling and set objectives

• Clarify why you’re selling (retirement, burnout, new opportunity, partnership breakup, etc.).
• Define your ideal outcome:
  • Full sale vs partial sale
  • Cash vs earn-out
  • Keeping or exiting management
  • Timeline (6–24 months

Buyers want clarity. Your objectives affect valuation, deal structure, and buyer type.

2. Prepare your business for sale

• Clean up the physical business so it looks attractive
• Ensure financial statements are clean and accurate – 3 to 5 years preferred.
• Pay down debts if possible
• Renew licenses and contracts
• Organize SOPs and manuals
• Remove personal expenses from books
• Ensure key employees have agreements or retention plans

Resources – CPA Canada

• CPA Canada
• BDC Advisory Services

3. Determine the value of your business

Get a professional valuation based on:

• EBITDA multiples (commonly used for established businesses)
• Revenue multiples (for tech and high growth startups)
• Asset based valuation (for asset heavy businesses like manufacturing)
• Discounted cash flow (DCF) models

Canadian Business Valuation Professionals

• CBV Institute (Chartered Business Valuators)
• Account firms specializing in Business Valuations
• Mergers and Acquisition Advisors and business brokers

4. Decide how you will sell your business

• Business broker
  • Best for small / medium businesses
  • They handle marketing, screening buyers, negotiations
  • Fees are typically 8 – 12% of the sale
• M&A Advisor
  • Best for sale above $5 Million
  • More sophisticated buyer outreach, valuation
• Private Sale (DIY)
  • Lower cost but requires more involvement and you may not have a wider buyer network.
  • Longer sale time
• Selling to employees / family succession buyout
  • Buyer is already familiar with the business
  • Often an easier transition
  • Some family tax planning may be required

5.Prepare a Confidential Information Memorandum (CIM)

• A CIM is the business “pitch deck” for buyers – usually prepared by a Broker, Advisor, or an Accountant.
  • Business overview
  • Financials (3–5 years)
  • Operations
  • Customers & suppliers
  • Market opportunity
  • Growth potential
  • Risks & mitigations
  • Asking price + justification

6. Market the business to buyers

• Create a blind listing (no business name shown).
• Screen interested buyers.
• Have NDAs signed before releasing details.
• Share CIM only with serious buyers.
  • Competitors
  • Investors
  • Private Equity
  • Employees
  • Family

7. Negotiate the offer

• Purchase price
• Payment terms:
  • Upfront cash
  • Vendor take-back financing (VTB)
  • Earn-outs
• Transition support period
• Inventory treatment
• Seller liabilities
• Employment requirements (if staying on temporarily)

8. Due diligence process for selling a business

• 3–5 years financial statements
• Tax returns
• Customer contracts
• Supplier agreements
• Licences and permits
• Employee contracts & payroll records
• Corporate minute book
• Asset lists & inventory reports

Review Business Ownership Transfer Guide by CRA

9. Finalize legal agreements

• Asset Purchase Agreement (APA) or Share Purchase Agreement (SPA)
• Non-compete and non-solicit clauses
• Transition or consulting agreement
• GST/HST treatment
• Employee transfer terms
• Assignment of lease10.

10. Tax Planning – Accountant and or Financial Planner

• Capital gains tax
• Recapture on depreciated assets
• GST/HST implications
• Lifetime Capital Gains Exemption (LCGE) — up to ~$1.25M on qualifying shares

11. Transition the business

• Announce sale to employees (timing is important).
• Introduce buyers to key clients and suppliers.
• Transfer passwords, procedures, manuals, bank accounts, software, licences, etc.
• Offer training or consulting support (30–180 days).

Smooth transitions protect the sale price and reputation.

12. Exit and Post-Sale

• Pay remaining taxes & liabilities
• Close corporate bank accounts
• Cancel licences/permits if needed
• Invest or allocate proceeds toward retirement or next venture