How to sell a business in Ontario: a step-by-step guide.

Before you start: what do you want from the sale?

Get clear on the outcome before you think about price. Owners who skip this step often accept a deal that looks good on paper and feels wrong a year later. Decide:

• Timeline: do you want out in six months, or are you willing to stay on for a year or two through a transition?
• Proceeds: how much do you need after tax to retire or move on? Do you need all of it at closing, or would you accept part of the price over time?
• People: how much does it matter that your employees keep their jobs and your customers are looked after the same way?
• Legacy: do you care whether the business keeps its name, its location and the way it operates?

Your answers decide which buyers make sense. A competitor may pay well but merge your team into theirs. A private equity fund may want you to stay for years and sell again in five. An operator that buys to own long term will usually keep the business running as it is.

Step 1: Get your financial records in order

Buyers, their lenders and their accountants will examine at least three years of results. Before you approach anyone:

• Have three years of financial statements prepared by a CPA. For a business of meaningful size, a review engagement carries more weight with buyers and lenders than a compilation.
• Stop running personal expenses through the company. Each one has to be identified and "added back," and every add-back invites questions.
• List your normalization adjustments: one-time costs, owner pay above or below market, family members on payroll, and rent paid to yourself if you own the building.
• Pull monthly revenue and gross margin for the last 24–36 months, revenue by customer, and a current list of equipment and inventory.

Clean records support a higher valuation and shorten due diligence, which is where most deals lose momentum.

Step 2: Understand what your business is worth

Most privately held businesses are valued as a multiple of normalized earnings: seller's discretionary earnings (SDE) for smaller owner-run companies and EBITDA for larger ones. The multiple reflects risk: how much the business depends on you, customer concentration, how predictable revenue is, growth, and margins.

Our guide What is my business worth? explains the calculation with a worked example. If you need a defensible number for a family transfer or partner buyout, hire a Chartered Business Valuator (CBV).

Step 3: Make the business less dependent on you

Every buyer asks the same question: what happens when the owner leaves? If you hold every key customer relationship, approve every quote and are the only person who can fix the main machine, a buyer sees risk and prices it in.

• Put a second-in-command or small management team in place and give them real authority.
• Introduce key customers and suppliers to other people in the business.
• Write down how core processes work: quoting, scheduling, production, billing.
• Put key contracts and leases in writing, and check whether they can be assigned to a new owner.

Step 4: Choose how you'll sell: broker, advisor or direct

There are three common routes:

• Business broker: markets the business to a wide pool of buyers for a success fee. Most common for smaller businesses.
• M&A advisor or boutique investment bank: runs a structured, competitive process for larger companies, usually for a retainer plus a success fee.
• Direct to a buyer: you speak with one or a few qualified buyers yourself (an acquisition firm, a competitor, a customer), with your accountant and lawyer advising.

Fees and trade-offs are compared in Business broker vs. selling direct.

Step 5: Assemble your advisors

• A transaction accountant. Tax planning is the step owners most often leave too late. To use the Lifetime Capital Gains Exemption on a share sale, your shares generally have to meet the qualified small business corporation tests, including a 24-month holding-period test. A company holding surplus cash or investments may need to be "purified" first, which takes time.
• A business lawyer who does M&A. Not your real estate or family lawyer. The purchase agreement decides most of your risk after closing.
• A broker or M&A advisor, if you choose that route in step 4.

Why structure matters so much is covered in Asset sale vs. share sale in Canada.

Step 6: Talk to buyers confidentially

Confidentiality protects your employees, customers and competitive position. Serious buyers sign a non-disclosure agreement (NDA) before seeing detailed financials. Early conversations cover the history of the business, what you want from a sale, and a high-level view of revenue and earnings.

Screen buyers as carefully as they screen you. Ask how they will pay for the acquisition, who will run the business after closing, what they plan to do with your team, and which deals they have closed before.

Step 7: Negotiate the letter of intent (LOI)

A letter of intent sets out the price, the structure (shares or assets), how much is paid at closing, any vendor take-back or earn-out, your role after the sale, the diligence timeline and a period of exclusivity. LOIs usually aren't binding on price, but they frame everything that follows. Push for specifics now; vague LOIs get renegotiated later.

Step 8: Due diligence

The buyer and their advisors verify what they've been told: financial statements and tax filings, contracts, employees, equipment, real estate, permits, environmental matters and customer relationships. Expect a document request list and a virtual data room. Diligence usually takes 45–90 days. Fast, complete answers keep the deal on schedule; problems found late are the most common reason prices drop.

Step 9: Sign the purchase agreement and close

The definitive agreement (a share purchase agreement or asset purchase agreement) covers the final price and adjustments, usually including a working capital target; representations and warranties; indemnities; any holdback or escrow; non-compete and non-solicit terms; and your transition role. Financing and landlord or customer consents are typical conditions of closing.

Step 10: Hand over the business

Most sellers stay involved after closing, from a few weeks to a year, to introduce the new owner to employees, customers and suppliers. Agree the length, your responsibilities and how you'll be paid for the transition before you sign.

Document checklist

Have these ready before you share anything with a buyer:

• Three years of financial statements and corporate tax returns
• Year-to-date financials and monthly revenue and gross margin for 24–36 months
• Revenue by customer (top 10–20) and by product or service line
• List of normalization adjustments with supporting documents
• Employee list with roles, tenure and pay (anonymized at first)
• Equipment and vehicle list with age and condition
• Lease, key customer and supplier contracts
• Corporate records: articles, minute book, share register
• Permits, licences, certifications and insurance policies

How long does it take to sell a business in Ontario?

Plan on 6–12 months from your first buyer conversations to closing, plus whatever time you spend preparing beforehand. When a business is marketed broadly, finding the right buyer is usually the longest stage. Selling directly to a buyer who already wants businesses like yours removes that stage. Altigo's acquisitions typically close 4–6 months after the first conversation.

Selling a business in Toronto and the GTA

The GTA has one of the deepest pools of business buyers in Canada: strategic acquirers, private equity firms, family offices, search funds, individual buyers and operating acquisition firms. That's good for sellers. It also means more inquiries from buyers who can't close. Ask for evidence of financing early, and favour buyers who have done this before.

Mistakes that cost sellers money

• Waiting until you're burned out. Results often slip in the final year, and buyers value the business on recent performance.
• Leaving tax planning until there's an LOI. Some of the most valuable planning needs up to two years.
• Telling employees or customers too early, before a deal is reasonably certain.
• Chasing the headline price instead of cash at closing, terms and what you keep after tax.
• Letting the business drift during diligence. Run it as if you're keeping it until the day you close.