Following the Exit Signs to New Horizons: Selling or Transitioning your Business

October 23, 2023

Pouring blood, sweat, and tears into building a strong, successful business is the common entrepreneur journey. But there also comes a point in the journey when an entrepreneur starts to think about succession and a successful transition for the business while preserving the value built into the corporation. This is vital to any business exit strategy. Whether it is freeing up resources for a new project, preparing for retirement and enjoying the fruits of your labour, or gearing up to transition to the next generation, exiting a business with a solid strategy is essential.

The process of exiting a business is filled with emotions, financial implications, and potential pitfalls. It can be a rollercoaster and a whole new learning journey for any entrepreneur. Seeking out expertise from a team of professionals is one of the best ways to ensure a seamless transition. Whether you are selling to an outside party or passing it on to your kids, transitioning out requires a well-planned approach that also considers your whole wealth management picture. So, where should you start? Here are three key areas to get the ball rolling in the right direction:

1. Pre-sale considerations for the seller:

  • Tax Planning: Consult with a tax specialist at least 2 years prior to the sale of your business. A tax specialist can help you structure your business optimally to reorganize the business if necessary, and ultimately increase net proceeds from the sale.  
  • Business Valuation: Before putting your business on the market, understand its worth. Engage a professional to conduct a business valuation. This will provide a realistic selling price and can serve as a negotiating tool.
  • Emotional Preparedness: This often-overlooked aspect is crucial. Are you emotionally ready to let go? Will you have any role in the business after the sale? It is essential to come to terms with these questions early on.

Other considerations include streamlining your business operations, having a reliable team in place, avoiding debt, tidying up any pending legal issues, and cleaning up your financial statements.

2. The process of selling:

  • Engaging Brokers or Advisors: While it is possible to sell your business on your own, a broker or advisor can bring expertise, market insights, and potential buyers. They handle negotiations, which can get complex and emotional.
  • Due Diligence: Once a buyer shows interest, they will undertake a due diligence process. They will review financial records, contracts, customer lists, and other essential aspects of the business. Be transparent to maintain trust.
  • Negotiating Terms: Negotiation is not just about the price but also payment terms, transition periods, performance metrics for future earn outs, non-compete agreements, and other clauses. Both parties should aim for a win-win scenario. Engage your tax specialist during the sale process to negotiate optimal terms from a tax perspective.

Other things to consider include confidentiality, marketing your business, and working with your group of preferred advisors to close the deal.  Note that some accounting and wealth management firms have access to networks of private investors. Working with them could assist you in finding potential qualified buyers.

3. Post-sale: Having a plan to invest the proceeds:

  • Future Goals and Plans: Define what you want to achieve after your business transition. Think about your purpose and what will bring value to your life. Consider working with a Certified Financial Planner to design a clear roadmap for your future goals. This in turn can help maximize the value of your wealth, protect you from potential future risks, and help you become the wealth architect of your life as you start a new chapter.
  • Diversification: Do not put all your proceeds in one basket. Diversify investments and assets to reduce volatility and strengthen your financial situation.
  • Clearing Debts: If you have any outstanding business or personal debts, consider settling them. Being debt-free provides peace of mind and a fresh start.

Selling or transitioning a business is more than just a financial decision. It is the culmination of years of hard work, passion, and dedication. By approaching the process with careful consideration, understanding the selling dynamics, and having a post-sale plan, you can ensure a smooth transition and a bright financial future.

The Angus Watt Advisory Group and our Mergers and Acquisition team can help you exit your business. Our decades of experience in investment, financial planning, and wealth management can help you design a clear action plan to move forward into your exciting future.

Contact us today to learn how we can support you through your transition journey!

Elena Babin, MBA, CPA, CFP®

Senior Advisor in Financial Planning & Business Development

Phone : 780-412-6624

Email :



National Bank Financial - Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

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