Congratulations on the rare feat of building a successful company! Selling your company is one of the biggest decisions - and hardest projects - in your entrepreneurial journey. So we wrote this guide to share what we have learned from the other side of the table.
I hope it helps you find the outcome that fits your goals and your people. Whatever you decide, I wish you luck with the process. If it would be useful to talk, in confidence and with no obligation, Rundle would be happy to engage.
Ian Black
Managing Partner, Rundle Partners
Most owners sell a company only once. The buyer across the table has done it dozens of times. That imbalance is why some owners end up with a deal that looks right on paper and feels wrong a year later.
This guide is not about getting the highest price. It is about getting the outcome that best fits what you want: the right price, yes, but also the right future for your employees, your company's name, and your family. It covers how long a sale really takes, how value is set, the kinds of buyers and what each is really after, how deals are put together, and what happens to your team the day after you sign.
Where we standRundle Partners is a buyer, and we would be glad if you called us. But a good sale is the one that fits your life, not ours, and for some owners that means a different buyer, or not selling yet. Where that is true, we say so.
About a 25-minute read. Written for owners of established Canadian companies, with a focus on businesses earning $3–15 million a year in EBITDA. Last updated October 2026.
1
Start with what you want from the sale
Every owner we meet opens with the same question: what is it worth? It is a fair question, and it is only one of several. The best outcomes come from treating price and everything else as equals from the start.
Know what the market is likely to pay
Price is not a number you choose. It is what a buyer will pay for your earnings, and that follows from fundamentals: your adjusted EBITDA multiplied by a multiple that reflects how predictable, transferable and growing those earnings are. We explain how in section 3, and our free estimator gives you an indicative range. Treat that range as information about the market, not as a target to negotiate toward.
Check it against what you need
Once you know the likely range, test it against your own finances. A cautious planner will often assume you can draw about 3% to 4% a year from invested capital without running down the principal. At $250,000 a year of household spending, that points to roughly $6 to $8 million invested, after tax and after you have paid off whatever you still owe.
If the likely range meets your needs comfortably, you have room to put other priorities first. If it does not, the honest options are to wait and build the business, to structure part of the proceeds around future performance, or to accept that a sale now means a different lifestyle than the one you imagined. All three are legitimate. Finding out now is far better than finding out in negotiations.
Decide what matters beyond price
Most owners care about several of the following at least as much as the last few percent of price, and rarely say so until they are deep into a process:
- Your employees. Who keeps their job, who gets a stake, and how the team is told.
- The company's reputation. Its name, its standards, and how customers and suppliers will be treated.
- Your family. Whether family members who work in the business can stay, and in what roles.
- Your own role. How long you stay, in what capacity, and what you are free to do afterward.
- Certainty and speed. A clean, reliable close is worth more to some owners than a higher number that might not hold.
- Confidentiality. Who learns of the sale, and when.
Give these the same weight as price. Many owners realize after closing that they would have traded a few percent of price for a better answer on one of them. Write them down, rank them, and share the list with your advisors and every buyer you meet.
A word on your advisors' incentivesBrokers and M&A advisors do valuable work, and most are paid a success fee that is a percentage of the price. That is a normal arrangement, but it means their financial interest points in one direction. Employees, reputation, family and legacy do not appear in a fee. Tell your advisors in writing what matters to you besides price, and ask how they will help you protect it.
Know why now
There are two kinds of reasons to sell. Pull reasons are the things you are moving toward: a next chapter, time with family, a different project. Push reasons are what you are escaping: burnout, a health scare, a partner dispute, a downturn you are tired of riding out. Both are valid, but push reasons weaken your hand. Buyers can sense urgency, and urgency costs money. The best time to sell is when you do not have to.
Treat family succession as a real option, and test it
If you have children in the business, ask two questions. Do you want to hand it to them, and can they run it, with the team and customers behind them? And if you sell, can the family members who work there stay? The first needs an honest test: can the family afford to buy you out at a fair price, or will you end up financing your own exit through a long note? Families that skip this conversation often drift into a sale years later, at a worse moment. The second belongs on your list of priorities, and in the negotiation.
Do this firstWrite a single page: the likely market range for your business, the after-tax amount you need, your ideal timing, and your top three priorities besides price. Everything else in this guide is easier once you have that page.
2
How long a sale really takes
Plan on longer than you think. A full, competitive sale usually takes 6 to 9 months from the day you go to market, and the work that earns you a good price starts well before that. A direct conversation with a single buyer can move much faster, but the speed has a price: fewer alternatives for you.
| Phase | Typical time | What happens |
|---|---|---|
| Preparation | 6 to 24 months before launch | Tighten the financials, reduce your own role in daily operations, fix known legal and tax issues, decide your priorities. |
| First conversations | Days to weeks | You meet buyers, share a short summary under a mutual NDA, and get a feel for fit, price range and structure. A buyer may put a short, non-binding expression of interest in writing to build alignment before a letter of intent. |
| Letter of intent | 10 to 30 days from the first conversation, in a direct process | A non-binding document sets the price, structure, exclusivity period and key terms. This is where your leverage is greatest. |
| Diligence and legal documents | 60 days or more from letter of intent to close | The buyer tests the numbers, customers, contracts and people; lawyers draft the purchase agreement. |
| Closing and transition | Day one through the first 100 days | Funds move, announcements go out, and the real integration begins. |
If you hire an advisor to run a broad auction, add the time to prepare marketing materials, contact buyers, hold management meetings and collect and negotiate bids. That is why 6 to 9 months is a sensible expectation for a brokered process, and why twelve months or more from start to finish is common.
What makes deals slip
Almost every delay traces back to the same handful of causes: financial statements that cannot be reconciled quickly, a customer concentration surprise, contracts that need a counterparty's consent, a tax structure that was settled too late, and a key person nobody had documented. The sale takes as long as your slowest document.
What you can control
Respond to information requests within a day or two. Build your data room early: three years of financials, customer and supplier contracts, corporate records, employee agreements and leases. Bring your lawyer and tax advisor in before the letter of intent is signed, not after. Owners who do this routinely close faster and, just as importantly, keep the buyer's confidence when the inevitable questions arrive.
3
What your business is worth
For an established, profitable company, value is almost always expressed as a multiple of adjusted EBITDA: earnings before interest, taxes, depreciation and amortization, cleaned up to show what the business earns on a normal basis. The multiple is what a buyer will pay for each dollar of those earnings.
Adjusted EBITDA is a negotiated number
Your accountant produces the starting figure. Then come the adjustments. Add back what a buyer will not need to keep paying: the portion of your own pay that exceeds what a replacement manager would cost, personal expenses run through the company, and genuine one-off costs such as a lawsuit settlement or a failed system launch. Subtract what the books flatter: a salary below market for your role, deferred maintenance, or a one-time windfall.
Expect the buyer's accountants to test every add-back. The adjustments you can support with documents will survive; the ones you cannot will not. Each dollar of EBITDA is worth five to seven dollars of price, so a single contested add-back can move the headline number.
The multiple: where owners get surprised
Owner-managed Canadian companies earning $3 to $15 million in EBITDA mostly change hands somewhere between about four and eight times adjusted EBITDA. That wide band is the whole story. Two companies with identical earnings can sell for prices millions apart, because buyers are really pricing how safe and how transferable those earnings are.
| What buyers look at | Pushes the multiple up | Pushes it down |
|---|---|---|
| Recurring revenue | Contracts, subscriptions, steady reorders | One-off projects, revenue that must be re-won each year |
| Customer concentration | No customer above 10% to 15% of revenue | One customer above 30% to 35% |
| Dependence on the owner | The business runs when you are away | Key customers, pricing and decisions all run through you |
| Growth and margins | Steady growth, stable or rising margins | Flat or shrinking revenue, margin erosion |
| Management depth | A team that already runs it day to day | No real second layer |
| Size | Larger companies attract more and better-funded buyers | Smaller companies carry more risk per dollar of earnings |
| Leadership succession | A successor already in the seat, so the company outlasts you | No successor and no plan |
| Exposure to AI | Low exposure, or AI mainly makes you cheaper and better | A large part of what you sell could be automated |
| Cyclicality and capital needs | Resilient demand, light on capital spending | Cyclical demand, heavy ongoing equipment spend |
Two of those factors deserve a word because owners tend to overlook them. Leadership succession: a buyer is taking on the risk that the company depends on you, and a successor who is already in the seat removes most of it. Exposure to AI: buyers now ask whether what you sell could be automated or undercut. A specific plan, covering which services are exposed, how you are using AI to cut cost or add value, and what is hard to copy, counts for more than reassurance.
A tale of two companies
Picture two business-services companies, each earning $5 million of adjusted EBITDA. The first has 70% recurring revenue under multi-year contracts, no customer above 8%, and a general manager who runs operations. A buyer could reasonably pay somewhere around 5.5 to 8 times earnings, or $27 to $40 million. The second has project-based revenue, one customer at 35% of sales, and an owner who personally manages every key relationship. The same buyer might offer 4 to 6.5 times, or $20 to $33 million. Same earnings, and a gap of about $7 million between the midpoints of the two ranges.
That gap is also your opportunity. Most of what separates the two companies can be improved in 12 to 24 months, and the improvement is usually worth more than the effort it takes.
Price is not the same as cash
The headline number is the enterprise value: what the business as a whole is worth. What reaches you is smaller. Debt is repaid at closing, a target level of working capital must stay in the business, advisors and lawyers are paid, part of the price may be held back or paid later, and taxes follow. We walk through the arithmetic with a real example in the section on deal structure. Always compare offers on what you take home, and when, not on the headline.
Other ways to value a business
An asset-based approach matters for asset-heavy businesses such as real estate holdings or some distribution companies. Revenue multiples appear in software, where growth outweighs current profit. Discounted cash flow models are useful for testing assumptions but rarely decide a price in this market. For most established companies in the $3–15 million EBITDA range, the EBITDA multiple is what buyers anchor to.
Valuation mistakes we see
- Using revenue multiples from headlines. The price a software company fetched says little about your service business.
- Anchoring on a friend's sale. You do not know their terms, their growth, or how much of the price was contingent.
- Anchoring to the number you want, not the one the fundamentals support. The number you want is about you. The number a buyer will pay is about the business. Anchoring to the first leads to rejected offers, stalled processes and, eventually, a sale at a worse moment. Anchor to your adjusted EBITDA and to evidence of what comparable companies actually sold for.
- Counting an unusually good year as normal. Buyers look at several years, and they discount the peak.
- Believing the highest opening estimate. Advisors competing for a mandate sometimes quote an optimistic number. Ask for the comparable deals behind it.
- Ignoring what the earnings cost to produce. If you must replace equipment next year, the buyer will price that in.
Try itOur free valuation estimator turns these factors into an indicative range for your business in about two minutes. Nothing you enter leaves your browser.
4
Getting ready: what buyers look at
A serious buyer will examine six things: your financials, your customers, your people, your operations, your legal and tax position, and your plan for growth. You do not need to be perfect in any of them. You need to be honest, organized and consistent, because what costs owners money is not weakness, it is surprise.
Assemble the documents and the story
Before you speak with serious buyers, pull everything into one consolidated, organized view: three to five years of financial statements, a summary of your customers and contracts, an organization chart with your key people, the handful of operating numbers you manage the business by, and a growth plan. Then write a one- or two-page narrative: what the company does, why customers choose it and stay, how it makes money, what is hard to copy, and where it goes next.
A consolidated view and a clear, consistent story do three things. They let a buyer understand the business quickly, they show that you run it with discipline, and they stop different documents from telling slightly different stories, which is how trust erodes. Bring your accountant and your lawyer in at this stage, not later. The accountant reconciles and presents the numbers. The lawyer reviews contracts, corporate records and anything that could surprise a buyer, while you can still fix it.
The fixes that pay back most
- Close your books quickly and accurately. Monthly financial statements within 15 days of month-end, prepared on an accrual basis, and ideally reviewed or audited, give a buyer confidence that the earnings are real. Buyers pay for earnings they can verify.
- Show a few years of improving performance. Buyers look for two or three years of improvement they can believe, not one good year. Do not pull cash out of the business in a way that leaves it thin; healthy retained earnings signal a sound company.
- Keep investing. Deferring equipment, maintenance and systems to flatter a year lowers what a buyer will pay later, because they will price the catch-up.
- Reduce customer concentration and add recurring revenue. Win a second and third large customer, extend your biggest customer's contract, and move work onto retainers or contracts where you can.
- Move relationships and decisions off you. Introduce a second senior person to every important customer, supplier and employee, and let them make some decisions in front of you. A business that cannot function without its owner is hard to sell.
- Write a plan with measurable goals. A formal strategic plan with milestones for the next three years shows a buyer the business has somewhere to go, and gives you something concrete to discuss.
- Make processes repeatable, and look after your people. Document pricing, quoting, onboarding and quality checks. Resolve internal conflicts and keep turnover low; a strong, stable team is worth real money, especially where the assets are people.
- Collect proof. Testimonials and references from long-standing customers on why they buy from you and why they stay.
- Tidy the corporate housekeeping. Up-to-date share registers and minute books, signed intellectual-property and employment agreements, permits and licences in good standing, leases that can be assigned.
- Disclose early. If a problem exists, say so in the first conversation. A known issue is a negotiating point. A discovered one is a trust problem, and it usually costs several times as much.
What not to do
Do not defer maintenance or cut growth spending to make a year look better; buyers see it and adjust the price downward. Do not pull revenue forward. Do not start a major new venture or large capital project in the middle of a process. And do not neglect the business, because a weak quarter during diligence is the most common way a good deal goes sideways.
Should you commission a quality-of-earnings report?
For companies above roughly $3 million of EBITDA, a sell-side quality-of-earnings report by an independent accounting firm is often worth the cost, which is typically in the tens of thousands of dollars. It identifies issues while you can still fix them, supports your adjustments, and shortens the buyer's diligence, which reduces the chance of a late price cut.
Choose the firm carefully. Look at the large regional and national accounting firms that have an active M&A practice. Buyers and their lenders know those names and trust their work, and a report from a firm that sees transactions every week carries more weight than one from a firm the buyer has never heard of.
5
Who might buy you
Different buyers want different things from your company, and they pay and behave accordingly. Knowing which kind you are talking to is half of negotiating with them.
| Buyer | What they want | What to ask |
|---|---|---|
| Strategic buyer (a competitor, supplier or customer) | Synergies: cost savings, new customers, new capabilities | Which of our roles overlap with yours? Will our brand and locations remain? |
| Traditional private equity fund | Buy, improve and resell within roughly five to seven years | When do you expect to sell this company again, and what happens to my team then? |
| Long-term private equity owner | Durable earnings and growth, held for the long run | What is your track record with the companies you hold? Can I speak to the founders? |
| Independent sponsor or search-fund buyer | A single company to run or oversee, often backed by investors raised deal by deal | Is your financing committed, or does it depend on closing? |
| Management or employee buyout | Continuity, with financing often supplied partly by you | How much of the price is a note I carry, and what protects it? |
| Family or individual buyer | An operating business to own and run | Can they fund the price, and can they run the company? |
Private equity or a strategic buyer?
Owners often frame this as a price question. It is rarely only that.
- Price. A strategic buyer can sometimes pay more, because it can capture cost savings or revenue you could never capture alone. Private equity pays for the cash flow and growth the business already has and the improvements it can make. If synergies are real and large, expect the strategic offer to reflect it. Where they are small, the gap narrows or reverses.
- Certainty. Private equity buyers usually arrive with financing arranged and a decision process they control. Strategic buyers may need board, regulatory or competition-law approvals, and corporate priorities can change in the middle of a deal.
- Your team and your brand. Strategic acquirers frequently fold the target into existing operations, which tends to remove overlapping roles and sometimes the brand. Private equity buyers usually keep management in place and add resources, though a fund that plans to resell in a few years will put your people through a second ownership change.
- Speed and information risk. Sharing detailed customer and pricing data with a competitor during diligence is a real risk. If it is the competitor who walks away, they now know your business. Ask about clean-team arrangements before you share anything sensitive.
- Your role afterward. A strategic buyer may not need a former owner. A private equity buyer usually needs the leadership to stay. Decide which you want.
Comparing offers properly
Line up each offer on what you would take home after debt, fees, escrow and tax, on when you would receive it, on how certain it is, and on what happens to the people and the company afterward. Then ask each buyer for the names of founders from companies they have acquired and call them. How a buyer treated the last owner is the best predictor of how it will treat you.
How a buyer runs diligence is a preview of how it will own
Watch how each buyer behaves once the conversation gets serious. Some treat diligence as a checklist exercise, with a long list of demands and little discussion. Others work directly with your team to learn the business, ask questions in context and fill in the picture. The second kind is showing you how it will behave as an owner. Ask for a mutual NDA that protects both sides, and notice how each buyer responds.
Where Rundle fits
We buy to hold. We have no planned exit date, and we structure each deal for a long hold. We keep the team, share equity with the people who help build the business, and invest to make the company stronger.
We have done this before. Our team has closed more than 10 acquisitions and has built businesses with billions in revenue, including leading Shopify Retail, Uber Eats and Uber Canada. What we bring to a company after closing is a value creation playbook shaped by that experience. It works on four things, agreed with your management team: a clear vision for the next five years, a stronger leadership team with employees sharing in the upside, modern systems and technology, and the capabilities a company lacks, such as finance, sales or technology.
Technology is where we are most distinctive. We modernize how a company sells, serves and operates, from a better CRM and cleaner data to marketing tools and practical uses of AI that take work out of the business. At Iris Booth, one of our portfolio companies, that has meant new leadership, a rebuilt technology stack and a new AI-enabled CRM. You can read more about what happens after we buy.
That is a specific kind of buyer, and it is not right for every owner. If you want a clean break with a premium for synergies, a strategic buyer may serve you better. If you want the company you built to stay itself, and to be better resourced, we would like to talk.
6
How the deal can be structured
Price is only one of the terms. Most deals combine several forms of consideration, and the mix changes both how much you receive and how much risk you carry. Two offers with the same headline can be worth very different amounts.
| Component | What it is | What to watch |
|---|---|---|
| Cash at closing | Paid to you when the deal closes | The cleanest part. Compare offers on how much of the price this is. |
| Rollover equity | You reinvest part of the proceeds and keep a stake in the company | Your terms compared with the buyer's: same price per share, same security, and protections for a minority holder. |
| Seller note | You lend part of the price to the buyer, repaid over time with interest | A common, flexible tool. Look at ranking behind senior lenders, security, interest rate, term and what triggers early repayment. |
| Earn-out | Extra payment if the business hits agreed targets after closing | Who controls the business, how the metric is defined, and what happens if it is sold during the earn-out. |
| Escrow or holdback | A portion of the price held back to cover claims | Typically 5% to 15% for 12 to 18 months. Negotiate the amount, the time and what counts as a claim. |
| Working-capital adjustment | The price adjusts up or down based on working capital at closing | The target level matters as much as the price. Agree the formula before the letter of intent. |
| Employment, consulting and non-compete | Terms for any role you keep and limits on competing afterward | Scope, duration and geography of the non-compete, and what you are paid for any transition work. |
Rollover equity: the second bite
In lower mid-market deals, sellers commonly roll 10% to 30% of their equity into the buyer's new structure. For the right owner it is the most interesting part of the deal. You take real money off the table at closing, and you keep a stake in a company that now has more capital, more resources and a professional owner. If that company is later sold or recapitalized, your stake is sold with it, which is often called the second bite.
Insist that you roll at the same price per share that the buyer pays, in the same type of security. Ask about information rights, a seat or observer role on the board, and tag-along rights if the buyer sells. A rollover can also defer tax on the part you reinvest, but only if your tax advisor structures it properly before the letter of intent.
Seller notes: a useful tool, not a last resort
A seller note is simply a loan from you to the buyer for part of the price, repaid over time with interest. It is one of the most common ingredients in lower mid-market deals, and often a good one. It can bridge a gap in price without the uncertainty of an earn-out, it lets the buyer put more capital into growing the company, it earns you interest, and it can spread a taxable gain over several years, which your tax advisor can structure. It also shows that you and the buyer are willing to share some of the risk.
What matters is the terms: how the note ranks behind senior lenders, what security backs it, the interest rate, the maturity, and what happens to payments if the business has a hard year. Agree those in the letter of intent, and a note can serve both sides well.
Earn-outs: handle with care
An earn-out bridges a disagreement about value: you believe in the growth plan, the buyer will pay for it only if it shows up. It can work. It also produces more post-closing disputes than any other term. The rule of thumb is that an earn-out is only as good as the buyer's incentive to let you earn it.
Prefer metrics you can influence and verify, such as revenue or gross profit, over EBITDA after allocated costs the buyer controls. Fix the accounting rules in the contract. Specify what the buyer may and may not do to the business during the period. Make sure any payment accelerates if the company is sold. And keep earn-outs to a minority of total consideration, so that the main price does not depend on someone else's decisions.
Share sale or asset sale
Sellers generally prefer to sell shares, which can qualify for the lifetime capital gains exemption on qualifying small business corporation shares (currently over $1 million per individual) and avoids a second layer of tax. Buyers often prefer to buy assets because it can simplify what they take on and improve their tax position. This is one of the first structural points to settle with your tax advisor. The rules change and your situation is specific, so treat everything here as orientation rather than advice.
From headline price to cash: a worked example
A business-services company earning $5 million of adjusted EBITDA sells at 5.5 times, a headline enterprise value of $27.5 million. Here is what the seller actually receives, using realistic assumptions and before income tax.
| Step | Amount |
|---|---|
| Headline enterprise value (5.5 times $5M) | $27.5M |
| Less debt repaid at closing | −$3.0M |
| Plus cash left in the business | +$1.0M |
| Equity value | $25.5M |
| Less advisor and legal fees (about 3% of price) | −$0.8M |
| Less rollover (20% of equity, reinvested) | −$5.1M |
| Less escrow (about 8% of price, held 15 months) | −$2.2M |
| Cash in hand at closing, before tax | $17.4M |
The seller reaches $17.4 million in cash on day one from a $27.5 million headline. A further $2.2 million arrives if the escrow clears, and $5.1 million stays invested alongside the buyer. Both are real value, with different timing and risk. None of these figures account for income tax, working-capital adjustments or earn-outs. That is the point: always ask for the offer in this format.
7
What happens to your team
For many owners this is the question underneath every other question, and it is the least discussed in most sale processes. Employees are often loyal to you in particular, and they will learn about the sale from you, from the buyer, or from rumour. Plan for the first.
What to ask every buyer
- Who will run the company after I leave, and have you identified them?
- What will change in the first 100 days? Please be specific about roles, offices, systems and reporting.
- Do you intend to combine any functions with your existing operations?
- How will you treat employee equity or bonus arrangements?
- May I speak with leaders at companies you have acquired?
What actually changes
Under a strategic buyer, the usual pressure is consolidation: back-office functions overlap and are combined, and some roles go. Under a private equity buyer, management usually stays and the changes come in governance, reporting and ambition: a board, tighter financial discipline, sharper targets, and often fresh capital for hiring and technology. Some of that change is healthy. What matters is whether the buyer tells you in advance, and whether the changes are ones your leaders can live with.
Telling your people
The sequence matters. Key managers are usually told shortly before signing, under confidentiality, so they hear it from you and can help plan. The wider team hears on the day of announcement, from you and the buyer together, with answers ready: what changes, what does not, and who to ask. Negotiate retention arrangements for the people the business cannot lose, and make sure they are paid from the purchase price and not from the company's future profits.
What to negotiate for your team
A management equity pool or employee ownership plan so that people who build value share in it. Written employment terms for the key leaders. Continuity of benefits for at least the first year. A clear communication plan. Binding job-security covenants are unusual and hard to get, but a buyer that is serious about keeping the team will usually commit in writing to how it intends to approach the first year.
Your name, your location, your role
Ask whether the brand stays, whether the locations stay, and what the buyer plans for the culture you built. And decide your own role: a transition period of 6 to 24 months, a rolled stake with a board seat, or a clean exit. Put it in the agreement.
How we approach it
We buy companies for their people and customers, and we expect to build with your management team. Equity for managers and employees is a standard part of how we structure deals, which we explain on our employee ownership page. We would rather tell you what changes before you sign than after.
8
Running a confidential process
Confidentiality protects your customers, your employees and your negotiating position. Customers who hear you are selling begin to wonder whether you will still support them. Employees begin to look elsewhere. Competitors start calling your clients. Assume that every extra person who knows raises the risk.
Who needs to know
Your spouse or partner, your lawyer, your accountant, a tax advisor, and perhaps one or two trusted senior managers. Buyers receive an anonymous summary first, then sign a mutual non-disclosure agreement before seeing company information. Identifying details are released in stages, as a buyer shows it is credible and serious.
Your advisors
- M&A advisor or broker. Worth serious consideration above about $3 million of EBITDA, when a competitive process can add value. Fees are usually a success fee of a few percent of the transaction value, often with a minimum. That structure rewards price, and only price, so be explicit in writing about your other priorities and how the advisor will protect them. Read the engagement letter for the length of any exclusivity and the tail period after it ends.
- Transaction lawyer. Not necessarily your day-to-day corporate lawyer. Ask how many deals of your size they have closed in the past two years.
- Tax advisor. Involve them before you sign a letter of intent. Structure decisions made later are more expensive and sometimes impossible.
- Accountant. For your financial statements and, where appropriate, a sell-side quality-of-earnings report.
Choose advisors on relevant experience and references, not on who quotes the highest price, and find out who will actually work on your deal day to day.
The expression of interest and the letter of intent
A buyer will often put a short, non-binding expression of interest in writing before a letter of intent. It sets out how the buyer sees the business, a likely price range and the broad shape of the deal, and it is a useful way to test alignment before either side spends heavily. Treat it as a conversation in writing, and use it to raise your priorities early.
The letter of intent is formally non-binding, but in practice it fixes the price, the structure and a period of exclusivity, usually 60 to 90 days. Your leverage is greatest before you sign it and drops quickly afterward. Negotiate the price and every material term now, including the working-capital target, escrow, rollover and earn-out, rather than leaving them for the purchase agreement.
Diligence and closing
Expect a long list of requests and many follow-up questions. Answer promptly and consistently. Keep running the business well, since a weak quarter at this stage gives the buyer a reason to renegotiate. The purchase agreement then sets out representations, warranties and indemnities. Your lawyer will manage the details, but you should understand the limits on your liability after closing, how long it lasts, and how much is at stake. On closing day, funds move, and the conversation shifts from selling to handing over.
9
Mistakes we see owners make
- Starting with price, not purpose. Without your page of priorities, every offer looks like a better or worse number and nothing else.
- Letting a broker steer you narrowly toward price. Most advisors are paid a percentage of the price, so their interest and yours are not identical. Employees, reputation, family and legacy do not show up in a fee. Say in writing what matters to you besides price, ask how your advisor will protect it, and compare every offer on the whole picture.
- Going to market with numbers no one has checked. Unverified or inconsistent financials cost far more in lost trust than the underlying issue would have.
- Telling too many people too soon. The more people who know before there is a signed deal, the more likely it leaks.
- Chasing the headline and ignoring the structure. A lower, cleaner, more certain offer can be worth more than a higher, contingent one.
- Neglecting the business during the process. A deal can be lost on one bad quarter.
- Leaving tax planning until after the letter of intent. The best structuring is done early, and some of it cannot be done later.
- Forgetting about life afterward. For many owners, the company is part of their identity. Think about what you will do on the Monday after closing, and the one after that.
10
Your first 90 days
You do not have to decide to sell in order to start. These steps cost little, keep every option open, and make the business more valuable whatever you decide.
| Days | What to do |
|---|---|
| 1 to 30 | Write your one-page summary of the number you need, your timing, and your priorities beyond price. Run an indicative valuation. Ask your accountant for an honest view of your adjusted EBITDA. Book an hour with a tax advisor to understand your structure options. |
| 31 to 60 | List the three biggest things a buyer would worry about, such as concentration, dependence on you, or financial reporting, and start fixing them. Assemble three years of clean financial statements into one consolidated view, and draft a one-page narrative of the business. Bring in your accountant and your lawyer. Have a first conversation with one or two possible advisors, and tell them your non-price priorities. |
| 61 to 90 | Speak to two or three potential buyers of different types, and speak to owners who have sold. Compare what you hear with your priorities. Decide whether to go to market now, prepare for twelve more months, or wait. |
11
Quick answers
How much is my business worth?
Most owner-managed Canadian companies with $3–15M of EBITDA sell for roughly 4 to 8 times adjusted EBITDA. Where you land in that range depends on how predictable your revenue is, how concentrated your customers are, how much the business depends on you, how fast it is growing and how strong your management team is. Our free valuation estimator gives you an indicative range in about two minutes.
Do I need a broker or M&A advisor to sell my business?
Not always, but it is worth seriously considering above roughly $3M of EBITDA, when a competitive process with several bidders can add meaningful value. An advisor typically charges a success fee of a few percent of the transaction value, which rewards price, so tell them in writing what else matters to you. If you already have a credible buyer approaching you directly, you can still hire a lawyer and tax advisor and negotiate without a broker.
How long does it take to sell a business in Canada?
Allow 12 to 24 months to prepare, then 6 to 9 months to run a full brokered process. With a direct approach, the path from first conversation to a letter of intent can take 10 to 30 days, and the path from letter of intent to closing typically takes 60 days or more.
Can I sell my company and stay involved?
Yes. Many owners stay for a transition period, keep a minority stake through rollover equity and a board seat, or step back entirely. What matters is deciding what you want before you talk to buyers, and writing it into the deal.
Is it better to sell to a private equity firm or a competitor?
Neither is better in general. A competitor may pay more where it can capture synergies, but often combines your team and brand into its own. A private equity buyer usually keeps management and the brand, but you need to ask whether it plans to resell in a few years. The right choice depends on what you want for your people and for yourself, not only on price.
What is rollover equity?
Rollover equity means you reinvest part of your sale proceeds in the buyer's new ownership structure, typically 10% to 30% of the equity in lower mid-market deals. You take part of your money at closing and keep a stake that benefits if the business grows and is later sold. Rolling can also defer tax on the portion you reinvest, which your tax advisor should structure.
What if I am not ready to sell yet?
Then use the time. The most valuable work happens one to three years before a sale: tightening financial reporting, reducing dependence on you, diversifying customers and building the team beneath you. Owners who prepare typically sell at better multiples and with fewer surprises.
How do I keep a sale confidential?
Tell as few people as possible, use signed NDAs before sharing company information, share an anonymous summary first, and keep your employees and customers out of the loop until a deal is signed. A good advisor or buyer will treat confidentiality as non-negotiable.
Next step
A straight conversation with a buyer
If you are thinking about a sale, now or in a few years, we are glad to talk. A first conversation is confidential, carries no obligation, and starts with your priorities, not ours. If we are not the right fit, we will say so, and we will often point you toward what is.
Or write to Ian Black, Managing Partner, at ian@rundlepartners.com, or call (437) 525-1223.
This guide is general information, not legal, tax or financial advice. Ranges and examples are illustrative and vary widely by business, sector and market conditions. Speak with qualified advisors about your own situation.