Ontario Business Brokers
Business for Sale in Toronto, Hamilton and surrounding areas in southern Ontario, Canada. We are a full service business brokerage here to help you buy or sell a business.
“I’m selling my business and I don’t know where to start!” – this is a common phrase heard often by business brokers. Selling your business does not have to be complicated but it is a process that is unique and one that most business owners don’t have much experience with.
What Buyers Want in a Business
Business buyers are a fickle bunch. Most of them (some say as many as 90%) will never actually buy a business. The role of the business broker is to qualify the serious business buyers from those that are “window shopping”. This is a critical role that a business brokerage plays. The focus of this article is to examine some key elements that most “serious” business buyers look for in a business for sale.
Historic cashflow
There is an expression that says “cash is king”. This is a very true statement if you are considering selling a business. Buyers are very interested in businesses that have a strong track record of historic earnings and cashflow. If you are a business owner thinking of an exit plan for your company, take a look at the past two to three years of your business’s financials. Determine what the cashflow is. If you need help, talk to your accountant or business broker for assistance. It is very difficult to sell a business that is losing money or one that is only marginally profitable. Too often, business brokers hear that an owner wants to “sell my business – but it has potential”. Potential is great, but there must also be cashflow.
Is the cashflow sustainable?
A buyer is not only interested in how much historic cashflow a business generates, but is more so interested if the business earnings are sustainable. A business buyer will be interested in a business that has an excellent earnings history only if he or she believes that they can buy the business and not have the earnings evaporate once the sale closes. If you own a business where the entire operation hinges on you being there – then this is a difficult type of business to sell. If you own a business where you can successfully train and transition a new owner with little disruption to the customers or earnings – these are the types of businesses that get sold more quickly.
Is the business priced right?
If a business has strong historic earnings, sustainable cashflow and is easy to transition – but is not priced properly – then the business will be difficult to sell. Getting the valuation (or listing price) correct for a business sale is critical. Example - if you own a small business that generates $75,000 in earnings every year to an owner/operator and you expect to ask a $1,000,000 price for the business, this will be extremely difficult, if not impossible, to sell. Consider that most small businesses are currently valued at 2-3x ‘seller’s discretionary cashflow’ when you think about a selling price. If you need help, talk to a business broker or a business valuator to assist you. If you are serious about selling your business please be realistic about the asking price.
Business potential
Don’t approach a business broker with “I’m thinking of Selling my Business. It earns me about $50,000 every year but it has potential, so I’d like to ask half-a-million dollars for it”. Potential needs to be a given during a business sale. Buyers expect potential. If there is none, then it will be very difficult to sell your business. If that is all you are offering though, you need to re-examine your sales strategy very closely. Buyers will naturally ask if there is so much potential in the business why haven’t you done anything with it yet. This is a very important point.
If you would like to talk to a professional about selling a business please contact us. We service the southern Ontario region from Toronto to Hamilton.
- Related Videos
- Related Articles
- Ask / Related Q&A
Wholesale cell phone accessories: A must to have
By: ankuea | 07/11/2009A Cell phone has become a necessity in today’s lifestyle. We are required to be connected to our loved ones and colleagues all the time. Different models and colors are available in the market, which not only serves the purpose of making & receiving call but can also be used as a substitute to computer by their advanced features
Breguet create works celebrating the 225 anniversary of the launch of limited edition commemorative table "1775"
By: ArthurAllenlin | 07/11/2009Table Bao-ji in the SIHH Watch Fair in Geneva to launch a celebration of invasive plants in limited edition to commemorate 225 anniversary of the table "1775", this table was inspired by Marechal Michal Ney Duke in 1813 ordered Breguet pocket watch No. 2121.
IWC Swiss brand
By: ArthurAllenlin | 07/11/2009IWC introduced the first IWC pocket watch ever since, IWC in the Swiss watch industry in many ways to achieve a special status, but also in the world's watch manufacturing industry has a pivotal position.
Apply Pesticides Cautiously for Saving Crop Damage
By: Article Expert | 07/11/2009Pesticides are chemical substances that help in inhibiting growth of pests. Fumigant is considered as highly toxic substance which is used for specific purpose. For obtaining best results, it is necessary to apply pesticides by following certain precautions.
Fertilizers: Rich Source of Essential Nutrients
By: Article Expert | 07/11/2009Fertilizers are chemical compounds that help in overall growth of the plants by supplying essential nutrients like nitrogen, potassium and phosphorus. One can avail different kinds of organic and inorganic fertilizers from the online market.
Direct Sales Opportunity: Important Choices
By: Ecp "direct Sales Guy" | 07/11/2009When entering the Direct sales field, you should always do lots of research on the company you are going to promote. Don't miss this step or you are not going to have early success in your business.
Fertilizers: Rich Source of Essential Nutrients
By: Article Expert | 07/11/2009Fertilizers are chemical compounds that help in overall growth of the plants by supplying essential nutrients like nitrogen, potassium and phosphorus. One can avail different kinds of organic and inorganic fertilizers from the online market.
Call Center Service - Keeping up with the growing demand! Call Center Services Helps you to Better Utilize Time
By: Ramshyam | 07/11/2009While service industry is booming, call center service and training has become very important.
Net Asset & Goodwill Valuation Principles for Selling a Small Business
By: Anne Brown | 31/10/2009 | BusinessWhen you consider selling a small business, there are a few ‘typical’ ways in which a small business can be valued. One way is to determine the net vale of the business’s tangible assets such as equipment, machinery, inventory, furniture, etc. Another ‘typical’ way a small business is valued is on the basis of a multiple of Seller’s Discretionary Earnings (SDE).
Knowing when to accept a business sale
By: Anne Brown | 26/10/2009 | BusinessIt has been said many times that selling a business is an emotional process. As an owner, you must know well in advance what is important to you and also be somewhat flexible on deal terms if you want to successfully sell your company. When an offer to purchase is submitted for your company, you may very well be disappointed with the first offer. As the owner, it is your prerogative to accept, reject or counter on any offer you receive. No matter how you proceed though, it is important to
The Challenge in Finding Good Businesses for Sale
By: Anne Brown | 20/10/2009 | BusinessAs a business buyer, it may seem extremely challenging to find good & profitable businesses for sale. The business re-sale marketplace is not as liquid or robust as the MLS system for selling real estate and this can be frustrating. Below is a summary of why it may be difficult to find a good business for sale in the Toronto, Ontario region and what you can do to increase your chances of finding one.
Listing a Middle Market Business For Sale
By: Anne Brown | 11/10/2009 | BusinessSelling a middle market company is a different type of transaction that requires a professional business intermediary that is familiar with transacting such deals.
High Demand Businesses For Sale
By: Anne Brown | 28/09/2009 | EntrepreneurshipThere are many different businesses for sale listed on the popular websites at any given time.The important thing to notice is that many of these business listings simply languish and so not sell for months or even longer
Why Business Brokers May Not List Your Business for Sale
By: Anne Brown | 28/09/2009 | EntrepreneurshipBusiness brokers typically work very hard to attract business for sale listings. The business brokerage profession is quite demanding and brokers, accordingly, need to be somewhat discerning in the business listings they take on.
Business Seller’s Remorse and Business Buyer’s Apprehension
By: Anne Brown | 20/09/2009 | BusinessBuying or selling a business is as much an emotional decision as it is a financial one. The point of this article is not to explain that seller’s remorse or the apprehension of a business buyer exists – this much is obvious.
When to inform employees if selling your business
By: Anne Brown | 20/09/2009 | BusinessIf you are selling a business, there are many different roles you will need to assume as the owner. You will need to deal with your various advisors on the deal: business broker, accountant and solicitor and also still run your business to the best of your ability.