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Selling Your Business in Calgary
What You Need to Know
Most business owners are great at running their businesses, but when it comes to selling their businesses, they’re completely in the dark. Who can blame them? There’s never been a need to learn.
That’s why the business owners we have represented over the years have been confused about the various issues related to selling a business. They’re venturing into unknown territory and that can be scary for even the most experienced entrepreneur.
Seller Misconceptions
Apart from confusion about the value of their businesses, we’ve found there are some common misconceptions or misunderstandings:
- Length of time it takes to sell a business
- Assets and liabilities that are being sold
- Asset versus share sale
- Working capital
- Types of buyers
- Deal structure
- Deal terms and conditions
Education is the Key
Our mandate is to help you understand the most important concepts, so you’ll not only be informed but also a little more at ease when talking to us or to buyers about your business. An educated seller is more likely to be a successful seller.
The information in this section, and in the other sections of this site, is provided so you can become a more savvy seller and make educated decisions instead of losing days or weeks of sleep. The more you know, the more control you’ll have over the entire business sale process. That’s extremely important because you’ll likely be dealing with sophisticated buyers who have a lot of experience buying businesses. If they think you’re naïve, they’ll try to take control of the deal and you’ll be playing catch up each step of the way.
Frequently Asked Questions
How do I know if it’s the right time to sell my business?
The best time to sell is when your business shows healthy sales and profits with an upward growth trend. Buyers are more interested when they see strong earnings and potential for continued success.
How is an Alberta business valued before selling?
Business valuation can follow three main methods:
- Earnings-based – looks at profits and earning potential.
- Market-based – compares financials, industry conditions, and sales multiples.
- Asset-based – focuses on the adjusted book or liquidation value of assets.
Why should I use a business broker?
A broker ensures your business is valued properly, provides a Broker Opinion of Market Value (BOMV), creates a marketing strategy, and negotiates to secure the best price and terms. They also connect you with qualified buyers and guide you through the entire process.
What does the business sales process involve?
The business sale process typically includes:
- Planning – preparing a business exit plan strategy and timing.
- Valuation – determining fair market value.
- Information memorandum – preparing company details for qualified buyers.
- Finding buyers – marketing to active prospects.
- Negotiation – securing the right deal.
- Finalizing the sale – completing paperwork and closing.
How can I prepare my company for a successful sale?
To prepare, ensure financial records are accurate, operations are documented, infrastructure is in good order, and the business is priced reasonably. Offering a transferable lease and including a non-compete covenant can also make your company more attractive to buyers.
