Why Planning Ahead Is the Key to a Successful Business Sale
For many Canadian business owners, the business they’ve built is far more than a financial asset. It’s a legacy of vision, risk, and hard work—often the centerpiece of their retirement plan and family wealth. But when it comes time to step away, whether through a sale, succession, or wind-down, far too many owners leave the outcome to chance.
The reality is stark: 76 % of small business owners in Canada plan to exit in the next decade, representing more than $2 trillion in assets. Yet only 9 % have a formal succession plan. Compounding this challenge, research shows that up to 70 % of businesses listed for sale never actually sell, usually because they aren’t adequately prepared or are too dependent on their founder.
These numbers underscore an important truth: building a business takes strategy, but so does exiting one.
Why Early Planning Matters
Selling a business is not a quick process. In fact, most transactions can take up to 9 to 18 months to complete when everything goes smoothly. Waiting until you’re “ready” often means dealing with unexpected challenges—burnout, health issues, or buyer pressure—without the time to optimize outcomes.
Owners who delay often face lower valuations, ballooning tax bills, or worse, deals that collapse at the finish line. Planning ahead, on the other hand, provides the space to clean up financials, strengthen operations, identify successors, and position your business as attractive to the right buyers. It also gives you flexibility in timing your exit. Instead of being forced to sell under pressure, you can choose a moment when both your business and the market are aligned.
The Four Dimensions of Exit Readiness
At WealthCo, we encourage owners to think about exit readiness across four interconnected areas. Together, they determine whether you will walk away with clarity and confidence—or leave value behind.
Financial readiness is about more than the sale price. The real question is whether the proceeds—after tax—will support your retirement, lifestyle, and family commitments. This is where strategies like the Lifetime Capital Gains Exemption (LCGE), holding companies, or estate freezes can preserve more of your wealth.
Succession strategy asks whether your business can truly operate without you. Buyers look for strong leadership teams, governance, and systems that don’t depend on the founder. Without this, valuations drop, and deals often fall apart.
Legacy and estate planning ensures that the wealth you’ve created doesn’t just serve you today, but also supports your family and future generations. Trusts, charitable strategies, and intergenerational transfers can help align your legacy with your values, while also protecting your estate from unnecessary tax burdens.
Personal readiness is often overlooked. For many entrepreneurs, their identity is deeply tied to their business. Stepping away can be an emotional transition. Having a clear vision of what comes next—whether retirement, philanthropy, or a new venture—can make all the difference in how smooth that transition feels.
Avoiding Common Business Exit Pitfalls
One of the biggest mistakes business owners make is waiting too long to prepare. Exit planning isn’t something you can successfully compress into the final six months before a sale. Ensuring the corporation is properly purified and eligible for the Lifetime Capital Gains Exemption (LCGE) — whether utilizing the owners or multiple family members — can take up to 24 months. Without proper planning, clients risk missing out on significant tax savings or delaying optimal sale opportunities while waiting for purification.
It takes years to strengthen valuation drivers, address risks, and put the right structures in place.
Another common pitfall is underestimating buyer scrutiny. Clean financial records, reliable reporting, and reduced reliance on the founder all play a major role in whether a buyer sees your business as worth acquiring. Finally, many owners underestimate the emotional side of the transition. Even with the numbers in order, reluctance to let go can create friction that jeopardizes negotiations.
Exiting on Purpose, Not by Default
A successful business sale isn’t just about getting out—it’s about setting yourself up for what comes next. With thoughtful planning, you can reduce risk, preserve wealth, and ensure your legacy endures. Without it, you risk becoming another statistic in the long list of owners who never manage to sell at all.
So, where do you stand today? Are you financially ready? Have you mapped your succession strategy? Is your legacy plan structured and tax-efficient? And perhaps most importantly—are you emotionally prepared for the next chapter?
Take the First Step
If you’re not sure how you would answer those questions, WealthCo’s Business Exit Readiness Scorecard is a simple and practical place to start. In just five minutes, it reveals how prepared you are across the four pillars of exit readiness and highlights where you may need to focus before making one of the biggest financial decisions of your life.
You’ve spent decades building something extraordinary. Take a few minutes today to see how ready you are to step into what’s next.
[Take the Business Exit Readiness Scorecard]
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Business transitions are complex, and outcomes depend on individual circumstances. Please consult your advisor before making decisions related to succession, tax planning, or estate planning.
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