When we meet with business owners regarding the sale of their business, a question we often hear is, “I want to sell my business, but how exactly do I go about finding a buyer?” This is a complex question that actually revolves more around finding the right buyer and not just any buyer. The right buyer is someone who will see the maximum value in your company and make the entire sale process as seamless as possible.

The simple answer to this entire article is - a business is worth what someone is willing to pay for it. This is certainly a straightforward response, but as you will begin to understand, this small statement holds a lot of weight when determining the value of your business. Here are a few things to know in determining what your business is worth:

As a shareholder of a Canadian corporation, the value of your shares is an extremely important number to know. Many individuals know the value of their homes, cars, investments and other assets off the top of their head, but many business owners have no real understanding of the value of their business beyond the cash in the bank and maybe the value of some inventory or equipment. It is most likely that the value of the shares makes up a significant portion of your personal net worth and certainly a number you need to really understand.  

Planning the successful succession of a business takes years. The answer to when you should start the plan is easy – you need to start today. Most successful transaction plans take three to five years to fully implement. In fact, many can take up to ten years depending on the complexity and the length in which you wish to remain with the company in some capacity before fully retiring.

Many business owners see succession planning as the development of a plan to eventually sell their business. In actuality, succession planning is more about you, the business owner, and what you want to see happen in the next chapter of your life beyond the business. Your succession plan starts with a vision for the future. It is your roadmap for taking charge as to how your future will unfold. Whether your goals are financial security, family harmony, future health, or peace of mind, ultimately, it is about ensuring you are in control of your own future and how it turns out.