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Baby Boomer retirements are triggering an unprecedented surge in small business sales. In Canada, over 75% of small business owners plan to exit within the next decade, representing up to $2 trillion in business assets changing hands, according to the CFIB.
If you’re one of these sellers evaluating your succession plan, you may be struggling with the uncertainty of when to sell. Determining the best time to sell your business requires weighing these broader economic trends against your personal readiness. Here, we lay out all the factors to consider when timing your business sale.
The Great Wealth Transfer: A Historic Shift in Business Ownership
North America is currently experiencing the largest generational wealth transfer in history, primarily driven by retiring Baby Boomers—those born between 1946 and 1964.
Canada’s population has aged significantly between 1982 and 2024. Over 70% of Canadian business owners are now 54 or older, illustrating the demographic wave of Baby Boomer retirements fueling a surge in business ownership transitions. As this wave of boomer-owned businesses hits the market, buyers will have more choices. This trend could lead to a buyer’s market that drives down valuations for sellers.
Luckily, other factors may benefit sellers, such as lower interest rates, growing sectors and other market conditions, which we explore below.
Market Timing: Economic and Industry Factors
External market conditions influence how attractive and valuable your business is to buyers. Key factors include:
- Economic Climate: In boom times, buyers pay higher prices; in recessions, valuations drop.
- Interest Rates: High rates raise financing costs and lower valuations, while low rates let buyers pay more. As of early April 2025, the BOC dropped its policy rate to 2.75%, the lowest rate we’ve seen since 2022.
- Industry Trends: If your sector is hot, selling on the upswing can fetch a better price. If facing disruption or decline, earlier may be better.
- US Tariffs: Although they’ve sewn uncertainty in the market, it hasn’t been all bad. Tariffs have boosted Canadian-made goods’ demand but raised costs in manufacturing and agriculture sectors.
Personal Timing: Owner Goals and Readiness
Equally important are personal factors – your own motivations and preparedness. Sometimes, you need to sell despite broader market conditions. Preparing for this time properly can help you fetch the best price within a given economic environment.
Here’s what to consider:
- Retirement Plans: If you want to retire by a certain age, that sets your timeline (the vast majority of small business owners cite retirement as their reason to sell).
- Health/Burnout: Declining health or fatigue are signs it may be time. 22% of owners cite burnout in their decision to exit.
- New Opportunities: Wanting to start a new venture or spend more time with family means you must be emotionally ready to hand over the reins.
Balancing Market Conditions with Personal Needs
Because perfect alignment of market and personal factors is rare, advance planning is vital. Get your business sale-ready well before you intend to leave so you can act when conditions are favourable. If you receive a strong offer now, consider it – in a crowded market tomorrow, you might not do better.
Conversely, if you’re ready to exit but the economy is down, you might hold off (or bring in a partner) until conditions improve. The goal is to strike a balance that maximizes your sale value and meets your life goals.
Alberta Business Exchange Will Help You with Next Steps
By understanding market signals and your own readiness, you can choose an optimal exit time for your business. If you’re unsure, consider consulting an advisor like Alberta Business Exchange for personalized guidance. An experienced broker can assess your situation, help you interpret the market, and guide you through a well-planned sale – so you exit on the best terms for both your finances and your future.
Contact us today to learn more!