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Selling Your Business

Selling Your Business

During my career as a business person I have had the opportunity to be involved in the buying and selling of businesses. Thank goodness most went well but some had real serious challenges.

Succession Planning

As a commercial/residential REALTOR® for the last 20 years I have been involved in the selling of many client’s businesses and currently have 6 for sale and preparing the selling packages for more. Thunder Bay and surrounding areas have a lot of what I call ready to sell entrepreneurs that are considering retiring, turning over, wrapping up whatever and enjoying their hard earned slowing down phase of life.

I have learned through these experiences that with more planning, seeking advice, and preparing, the transition of selling your business flows a lot better than trying to wing it when the time comes to turn it over to that new group, family, employee or your partner or partners.

The process of selling your business has several phases that I recommend you address. You must look in the mirror and convince yourself the time is right to sell, otherwise you won’t be ready to get into the detailed negotiations that come with selling your business. Some reasons for selling are: retiring, illness/health issues, losing energy to keep up with the work required, partnership disputes and possibly boredom or just burnt out. The selling process involves discussing it with your key people at the right time, so they can get on board as well, to assist in the smooth transition and/or become part of it. Engage with your professional partners, accountants, lawyers, realtors, bankers, valuation appraisers, and mentors to assist in developing your selling package.

When preparing the selling package, it should be detailed and transparent to attract potential buyers. This involves showing hopefully growing sales or a strong sales strategy, gross and net profits, contracts you have, client lists, at least 2-3 years of financial statements and what is included in the sale: assets, equipment, properties with recent appraisals/valuation if available, and any environmental reports that will help the buyer get financing.

Include resumes of key employees and their responsibilities including your own. Indicate how you will, if requested, handle a smooth transition to the new buyer including how long you will help them keep it growing.

Discuss with your accountant and lawyer the preparation of the sales package to a buyer as an asset sale or share sale. There are distinct advantages to both types of sale methods. Be prepared if possible to consider accepting a vendor take back mortgage/loan for a period of time to facilitate the sale. Remember you will/should have the security of all the tangible assets, i.e. property, equipment, etc. for security to back this up.

You may determine after doing your presentation of a sales package that you might have to make improvements, adjustments, increase the bottom line in the next 2-3 years, get more contracts in order to get the valuation and sale price at the level that is fair and reasonable to both buyer and seller. The message here is planning well in advance to the selling of your business.

If the selling price can’t be supported by the business revenue, then you will have a hard time selling. Usually a business sale transaction can take up to 6-9 months from the time of the original acceptance of the offer. This is due to all the processes and due diligence that are required especially for confirming business realty audit, financing or environment concerns.

A final comment to the seller; selling your successful business is usually very emotional, but I can ensure you that the outcome is usually very rewarding to you both, emotionally and financially, and usually relieves a lot of stress.

There is a reason while only a small percentage (I believe 0.5% of the population) run businesses, but the rewards are incredible and very satisfying, especially when you sell a successful business.

Jack Mallon

Jack Mallon's dedicated approach to customer satisfaction has helped him to become one of Thunder Bay's top realtors. Having served on a number of boards and committees throughout the years, his community pride and numerous contributions to make Thunder Bay a better place to live, work and play have made him a true community champion.

The Thunder Bay Community Economic Development Commission (CEDC) can help you proactively prepare for the sale of your business. We offer a free and confidential listing service which includes assistance in writing the listing as well as free consulting and advice in selling your business. Call the CEDC at (807)625-3965 to make an appointment or visit

Thunder Bay CEDC/Thunder Bay & District Entrepreneur Centre

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