Business Enterprise Centre

Some Issues with Selling a Business in Canada’s Largest City

Many business owners looking to list a business for sale in Toronto deal with somewhat of a paradox.   The city of Toronto, Ontario is a bustling metropolis, filled with opportunity and it attracts numerous immigrant investors every year.  Yet some owners looking to sell a business state that they have trouble selling their small businesses in Toronto – Canada’s largest city.  This article will explore some of the reasons why company owners may list a business for sale in Toronto and have trouble finding a buyer.

There are consequences to not dealing with a professional

Listing a business for sale in Toronto is an entirely different process than selling a piece of real estate. Yet, some business owners looking to sell still choose to deal with salespeople that sell real estate.  The consequences can be that the business sales process goes awry and business for sale don’t attract the right Toronto buyers and the companies languish on the market.  If you are looking to sell your company (especially in a city as competitive as Toronto) then choose to deal with the professional that can properly assist you.

The business for sale is not priced properly

If you are looking to sell a small business, it is critical that you go to market with it being properly priced.  This is especially true if you’re in Toronto.  Selling a business in Toronto is not an easy task.  True, there are many immigrant investors that are attracted to the GTA and there are plenty of buyers – but there are plenty of sellers too.  Finding the right buyer for your business for sale Toronto is difficult enough so don’t make the take even more difficult by overpricing the business.  Owners that list their business too high generally don’t attract as many buyers as they could and the business gets ‘market stale’.  If you want to sell your business and attract qualified buyers from around the city, work with a professional that can assist you in the business sales process.

Please, report all your earnings!

Many small business owners in Toronto make the common (and highly unadvisable) mistake of not claiming some or all of their cash earnings from their companies.  There are many businesses for sale in Toronto where the owners have done this and believe that they have ‘saved’.  Besides this being a very big ‘no-no’ from CCRA, there is another cost involved to the small business seller.  Generally, small businesses are valued based on a multiple of earnings.  If ‘cash’ earnings of a small business are not reported then the business valuation is then that much smaller.  So, if a business owner believes he or she is saving in income taxes avoided, the truth is that they’ve made their business valuation that much tougher to justify.  As well, business buyers generally get a big ‘red flag’ when they encounter a business for sale that has an undeclared ‘cash’ component to it.  They are much more difficult to get financing for (if at all).  Honesty truly is the best policy.

Perhaps Toronto buyers are willing… but are they able?

Often, a potential business buyer will embark on a search for a business for sale in Toronto without the right forethought into the process… and what type of business they would like to own.  For instance, there are many restaurants, laundromats, gas stations and retail establishments for sale and a potential pool of buyers for these types of businesses.  The trouble is, are these potential buyers truly ready to own a dry cleaner or a printing shop?  To paraphrase an old saying, “the will is there, but not the skill”.  This is a common occurrence in Toronto where a large group of new investors and business buyers want to “go into business” but truly aren’t prepared for the challenges this involved.  The point is, if you want to sell your Toronto business it is important to properly qualify the buyer.  Most people believe that this is merely a financial exercise but a professional business brokers will tell you otherwise.

Not everyone has the patience and knowledge to start their own business from scratch. There are many factors that need to be considered to ensure that you are making the right decision.

It is very popular in today’s world for people to buy businesses that have already been established and making a constant flow of money. This can be a frustrating process as you need to research each company in depth to ensure that you choose one with potential that you will be able to increase in value of the set period. Don’t think that you have to make the decision by yourself. There is help offered if you choose to accept it. These experts will be able spot the business that have potential and the ones that you should avoid. This can save you a lot of time and money in the long run but you have to remember that it will cost you initially.

You have to come up with certain requirements so that the decision will be a lot easier, as you may want to buy a local company which will reduce the choices down further. For example if you are searching for a Queensland business for sale then you will only have to research the companies that are based in Queensland. There are the advantages as well as disadvantages of buying a Queensland business, the main disadvantage will be the fact that you are limiting your audience. If you have a local shop it is only beneficial to people in that area so you need to make it stand out from your competition to get them returning to you each time they require your service. There is a way to help eliminate this factor, by opening up an online shop it will allow people locally and people that live a fair distance to browse your shop or service and make a decision if they want anything.

Setting up an internet site for your company can be done fairly easily, if you know how to do it yourself you can implement your skills to get a site up and running. If you have no idea on this topic you can always get professional help who will be able to meet your requirements for a reasonable price.

As mentioned before about limiting your audience, this is not necessarily a bad thing. If you have a much smaller target audience it means that you can concentrate on them and make the service perfect for them. For example if you had a clothes shop specifically for women you will want to only stock women’s clothes which will allow you to get more styles and variations giving them more choices.

You are advised to come up with your plan of action before you make any payments so that you are fully aware of what you are going to do and when to do it. This will make it much easier for you and ensure that you get the maximum potential from your new business. If you can not afford the professional assistance, then just ensure that you research everything about the company before you make a final decision. Don’t be afraid to ask for proof of what they are claiming in order to settle your mind and be confident in the company you are investing money into. If you have any doubts you are often best trusting your gut feeling and backing off as it could end up being a very costly task. If you are lucky enough you will be able to ask around for advice and help to guarantee that you are making the right decision.

If you have been considering starting your own business, then before you get the ball rolling, you might want to consider doing a search on already developed businesses for sale. Buying an already established business could save you a lot of time and effort. It is considered that already established businesses are less prone to failure than new business startups.

Buying a business is one of the most important decisions you will ever have to make, so it is not something you want to rush into. Take your time and do your home work before you make the financial and emotional commitment.

Searching through business for sale websites, newspaper business for sale classifieds and business for sale magazines is a great start. Home based businesses, franchise opportunities, business opportunities, cafes, restaurants, transport, landscaping, trades and services, beauty salons, internet businesses are just to name a few.

Searching for businesses for sale via the internet will save you time and effort due to the fact that you can do it from the comfort of your own home. It also allows your spouse and family members to view the listings with you. Getting the ‘green light’ from your husband, wife or significant other is usually the last hurdle before signing on the dotted line. It is always advised to sit down with your family members and really go through all the aspects of the business you are considering buying, as this decision will almost certainly affect their lives one way or another. A perfect example of this is ‘will you have to change residency in order to run the business’?

There are a number of Australian business for sale websites which have quality business for sale listings, allowing you to contact the owners directly. On the other hand, for those of you that would rather have someone else doing all of the hard work for you; you can use a business broker. However, sometimes business brokers can be distracted due to the heavy work load, and as a result the purchase or sale of your business may not get the attention it deserves.