Selling a business in Canada can be difficult at the best of times. According to the Exit Planning Institute, only 30 to 40 per cent of businesses listed for sale actually sell. And in rural or remote communities, selling a business is often even more difficult.
However, there are a number of ways business owners in the North or remote areas can increase the chances of selling their enterprise.
Make sure your business is profitable
While having a profitable business in the North doesn’t guarantee you will be able to exit the business when you want, your business has a much lower chance of selling without healthy profits.
There are seven key areas you need to focus on when improving profitability.
Healthy, profitable businesses are valuable and the right buyers will pay good money for them no matter where they are.
Ensure the business doesn’t revolve around you
It’s difficult to sell a one-horse show where you’re the horse – in any community. It’s even more difficult in rural Canada.
A vibrant business that comes with a team is much easier to sell than a business where you, as the owner, make all the decisions and manage all the sales.
Building your team and empowering them to be able to work when you’re not around creates a business that isn’t totally reliant on you and is, therefore, more valuable.
Start planning early
Unfortunately, most people don’t think about selling their business until a catastrophic event happens. They have a health issue, someone close to them dies, a key staff member leaves or a pandemic hits.
Exiting your business should be something you’ve spent some time thinking about. This starts with having clarity about when you want to leave and what you’re going to do when you leave.
It also means you’ve prepared the business for other owners and you’ve been getting ready by maximizing the value of your business.
Be creative with your options
If you don’t think you will be able to easily sell your business, be creative in your options for exiting the business and maximizing your value. This means you may need to think about potential buyers years before you actually sell, grooming those buyers and making it easier for them to acquire you.
Staff, competition, friends and family are all potential buyers.
Most businesses are difficult to finance with regular banks, so creative financing and horse-trading might need to be part of your options.
And consider that you will have to finance some of the sale. What are you willing to finance, and at what rates?
Get some help
When you’re thinking of selling your business, it’s important to talk to your accountant to ensure you have solid financial advice in order to limit your taxes.
While your friends and neighbours might be working for corporations or governments that provide them with pensions, as a small business owner, much of your retirement is tied up in your business. Ensuring you have a clear path to maximize those retirement savings is key to a healthy financial future.
Additionally, you will need advice from your lawyer as you proceed with the sale or closure of your business.
And a professional broker who specializes in selling businesses in the North or rural areas is probably worth seeking out. A business broker will help you sell the business confidentially and maximize the money you get from your business by ensuring you get a proper valuation.
Selling your business is one of the largest transactions most business owners will ever make. It’s much more complicated than selling your home and often takes much longer, especially if you’re unprepared.
And selling a business in rural areas is often more difficult than selling in larger cities for various reasons. But with the right mindset and preparation, you can sell your business and get good value for it.
© Troy Media
Troy Media is an editorial content provider to media outlets and its own hosted community news outlets across Canada.