Across North America, millions of small and mid-sized business owners are approaching retirement age, and many hope to sell their business as part of their exit strategy. The challenge? Most businesses are not actually ready to be sold.
A recent BDC report estimates that over 40% of Canadian small business owners plan to exit within the next five years, yet many of these businesses are simply not ready. In fact, industry advisors often estimate that only 20–30% of businesses listed for sale are actually sold. The rest simply aren’t prepared, or buyers view them as too risky.
As the population ages and the wave of boomer-owned businesses hits the market, we may be facing a major succession gap: more owners wanting to sell, but fewer businesses positioned for a smooth, profitable transition.
The good news? You can change the outcome with early preparation.
When Should Business Owners Start Preparing to Sell?
Most owners assume they only need to start thinking about selling 1 to 2 years before exit. In reality, preparation ideally begins 3 to 5 years in advance—and in some industries, even sooner.
Here’s why early preparation matters:
- It gives you time to clean up financials and show multiple years of stability
- It allows you to build a business that runs without you
- It increases valuation by reducing risk for a buyer
- It makes your business more attractive to banks and investors
- It reduces stress when the sale window finally opens
The bottom line: The best time to prepare to sell your business is long before you’re emotionally ready to leave it.
The Top 3 Actions to Start Preparing Your Business for Sale
- Make Your Business Less Owner-Dependent
A buyer doesn’t want to purchase you; they want to purchase a self-sustaining company. You can begin removing yourself from the business by:
- Delegating operations and decision-making
- Strengthening your leadership team
- Building systems so the business can operate without your daily involvement
- Clean Up and Clarify Your Financial Picture
Your numbers tell your business’s story. Buyers want clarity, reliability, and proof of performance.
- Accurate financial statements (3–5 years of clean records)
- Reducing “owner perks” and personal expenses mixed into the business
- Demonstrating steady cash flow and strong margins
- Organizing key documents: contracts, leases, agreements, tax filings
- A strong financial foundation increases trust and price.
- Build Transferable Value, Not Just Revenue
Buyers look beyond sales figures. They want assets that will continue generating value. This may include:
- A stable, diversified customer base
- Recurring revenue streams
- Documented sales pipelines
- Strong vendor and supplier relationships
- Solid brand and reputation
- Updated equipment and infrastructure
Think of your business like a home: updates and maintenance ensure a stronger market price.
Is This Becoming a Problem? Ye, But It’s a Solvable One.
With a surge of aging owners planning to retire, there is growing concern about economic fallout if businesses cannot transition smoothly. Communities rely on these businesses for jobs, services, and stability.
But with intentional preparation, years before the “For Sale” sign goes up, business owners can:
- Increase the value of their business
- Attract stronger buyers
- Reduce stress during the transition
- Protect employees
- Secure their retirement
You’ve built something worth selling. Preparing properly ensures you also get paid what it’s worth. Reach out to us if we can help you.
