How do I find businesses for sale by owner in Canada?

A business for sale by owner is one the owner sells without a broker. Beyond any listing the owner posts, finding one can mean reaching owners and starting a conversation. BDC’s guide to the steps in buying a business says to tap your business network, industry contacts and advisors to identify potential candidates. It also quotes Brett Weese, a senior director at BDC, who calls speaking to sellers directly one of the best approaches to making an acquisition.

Build the list through people you already know

Tell your accountant, lawyer, banker and suppliers in your target industry what you are looking for. Ask whether they know owners who may be thinking about an exit. Keep the request specific: the type of business, the region and the size you can manage. Broader and more general searches are covered in where to look for businesses for sale in Canada.

Approach the owner and ask why

When you contact an owner who has not listed, say who you are and what you want. BDC’s guide says to find out why they want to sell. Weese says it is best to build a relationship and foster the owner’s trust first. Take notes, and test the answer later against the records you are shown.

Put the deal on paper before you see the books

BDC says it is customary to sign a confidentiality agreement and to write a letter of intent to pursue discussions with the seller. In due diligence, BDC asks whether the figures match what the owner tells you, and whether tax returns match the financial statements. Have your accountant do that comparison, and a lawyer review the agreements.