Standard costs associated with selling or buying a business in Toronto, Ontario, include fees to accountants and lawyers, and commission costs to the business broker. Generally, we suggest assuming at least $10,000 in closing costs on top of the commission costs that consist of a percentage of the transaction price – normally 10%. The commission costs are paid by the seller, whereas both parties will carry closing costs as they each need an accountant and lawyer. Additional costs to the seller may arise from settling outstanding debts, lawsuits, or other liabilities before the transaction is closed.

It generally takes, on average, between 10 to 16 months to sell a business in Toronto, Ontario. Larger and more complicated ones may take longer, as will ones that require a specialized skill set in the purchaser or are in a location that is not as attractive to buyers. Our standard engagement is typically 12 months. 

The sooner you have all the information needed to begin the marketing process, the shorter the time period should be. It is also important that the business be priced properly right from the start.

The sooner you have all the information needed to begin the marketing process, the shorter the time period should be. It is also important that the business be priced properly right from the start.

The best way to sell your business in Toronto, Ontario, is to hire a business broker with extensive experience working with small and medium-sized business owners. Experienced business brokers can offer advice and guidance through every step of the sale.

A considerable amount of work goes into preparing the business’ marketing materials before a sales pitch is made, and adequate financial information is crucial. At Ontario Commercial Group, we see to it that your company is properly valued before the process begins, helping clients understand how their balance sheets and income statements are connected to their cash flow statements. Beyond financial information, we also ensure that working capital and physical materials, such as inventory and property, plant, and equipment are all at proper levels. Getting an idea of supplier and customer concentration levels is another important task, as potential buyers will want some level of assurance that current customers will stay as the company changes hands. Our expert team leads you through this complex process, every step of the way.

The team at Ontario Commercial Group qualifies buyers extensively. It starts with them completing a confidentiality agreement and a buyer registration, assessing their risk tolerance, skills and experience, financial capacity, credit history, and lifestyle goals as well as geographic locations that would work for them. Only after these assessments will we decide what businesses could be suitable to introduce them to. We minimize the risk of exposure by not showing them business opportunities that are not suitable for them.

The most important documents in any business sale are the company’s financial reports. More specifically, you’ll need to recast your company’s financial statements so prospective buyers can evaluate how much the company makes each year instead of how much taxable income it generates. This distinction is also crucial when it comes to accurately pricing a business for sale.

We do not require upfront fees or monthly retainer fees. We believe that your success is our success. We are only paid when the business sells.

This question cannot be answered without further information about your business, and ideally with the help of your accountant. Typical questions might be: Have you used your lifetime capital gains tax exemption? Can we structure this as a share sale, or must it be an asset sale? Do you have loss carry forward? Who owns the shares and how long have they owned them? If an asset sale is what allocation of the purchase price will minimize tax? Do we have a recent appraisal of the assets to be conveyed? We will work with your accountant, the purchaser’s accountant, your lawyer, and theirs to create the deal structure that works for both of you.

Either way is possible. You may receive offers for just the business with rental income to you, as well as offers to purchase the business along with the real estate. You can choose whichever option you prefer. Depending on the type of buyer your business would most likely bring, you may want to consider the purchase of the property as an option for the buyer to widen the pool of potential buyers. Visit our “Sell My Business Property” section for more information.

When a buyer is sufficiently interested in your business, he or she will, or should, submit an offer in writing. This offer or proposal may have one or more contingencies. Usually, the contingencies concern a detailed review of your financial records and may also include a review of your lease arrangements, franchise agreement (if there is one), or other pertinent details of the business. You may accept the terms of the offer or you may make a counter-proposal. You should understand, however, that if you do not accept the buyer’s proposal, the buyer can withdraw it at any time. At first review, you may not be pleased with a particular offer; however, it is important to look at it carefully. It may be lacking in some areas, but it might also have some pluses to seriously consider. There is an old adage that says, “The first offer is generally the best one the seller will receive.” This does not mean that you should accept the first, or any offer — just that all offers should be looked at carefully.

Once you and the buyer are in agreement, both of you should work to and remove the contingencies in the offer. It is important that you cooperate fully in this process. You don’t want the buyer to think that you are hiding anything. The buyer may, at this point, bring in outside advisors to help them review the information. When all the conditions have been met, final papers will be drawn and signed. Once the closing has been completed, money will be distributed and the new owner will take possession of the business.

With a skilled workforce, cutting-edge research and development facilities, and award-winning manufacturing, Ontario remains one of the most competitive places for businesses to invest and grow.

A business broker is a person or company that specializes in the purchase and sale of small, main-street businesses. Their responsibilities include assisting businesses in obtaining a favourable price, submitting paperwork correctly, and meeting any licensing and permitting requirements. Here is why you need a business broker to buy a business:

• Assists in determining business value.
• Guides business regulations and financing options.
• Evaluate the business’s strengths and weaknesses.
• Maintains communication with vendors, purchasers, and various stakeholders.
• Manages details, prepares for financing, and negotiates franchise agreements.
• Offers buyer representation for business deal negotiation.

While there is no such thing as the “perfect” business, it is our primary responsibility at Ontario Commercial Group to understand the value of finding one that meets your needs, talents, skills, and lifestyle. We have access to a wide range of businesses in Toronto, Ontario, for you to consider, as well as the knowledge and experience to guide you through the process.

The best time to sell a business is when it is performing well: the financials are improving, sales are increasing, the team is strong, and demand is high.