How do I decide whether, and when, to sell my business?

Signs it might be time to think about selling

Owners usually start thinking seriously about a sale for one of a few reasons: retirement, a health change, a partner leaving, burnout, an unsolicited approach from a buyer, or a sense that the business has reached a size where a bigger owner could take it further. None of these forces a decision by itself. What matters is whether you can separate the emotional pull of the moment from a clear-eyed look at the business's finances, its dependence on you personally, and what buyers in your sector are actually paying.

Talking to your accountant first, before a broker or a buyer, keeps the conversation about your own goals rather than someone else's timetable.

How a business gets valued

There is no fixed formula. Small and mid-sized Ontario businesses are usually valued with some combination of a multiple of normalized earnings, the value of the underlying assets, and comparison to similar businesses that have sold. Which method carries the most weight depends on the industry, how much of the value depends on you personally, and how reliable the financial records are.

An accountant can give a first, informal read from your financial statements. A chartered business valuator gives an independent opinion where the price is contested, a family member is buying, or a lender may later ask how a number was reached. We do not value businesses or recommend a price; that is kept deliberately separate from the legal work.

Testing the market without committing

Many owners want to know what the business might fetch before deciding anything. A broker or an accountant can sound out interest using a blind profile that describes the business without naming it, so employees, customers and competitors do not find out you are thinking about a sale. A confidentiality agreement should be in place before any real financial information goes out, even at this early stage.

If you decide to proceed, keep a short record of who has been told what and when; it matters later if a dispute arises about what a buyer knew.

Getting advisors and records in order early

The single biggest driver of a smooth sale is having your own records in order before a buyer asks for them. Three years of financial statements that tie to your tax filings, an up-to-date minute book, a clear list of contracts and leases, and a current employee list save weeks later. Sort out any personal transactions run through the business, such as vehicles or family wages, since a buyer's accountant will ask about them regardless.

Assemble your team early: an accountant who has done a sale before, and a lawyer who reviews the letter of intent before you sign anything, not after.