How does selling a business actually work, start to finish?

A business sale feels chaotic while you are in the middle of it, with negotiations, document requests and delays arriving out of order. Underneath that, though, almost every Canadian small business sale moves through the same handful of stages, and knowing what comes next makes each one easier to manage.

Preparation comes before anyone else is told

Before a business goes to market, most owners spend time cleaning up financial statements, reducing how dependent the business is on them personally, and gathering the documents a buyer will eventually ask for. This work happens quietly, often months before a broker is engaged or a listing goes live, because fixing problems here is far cheaper than fixing them mid-negotiation.

Marketing usually stays confidential

Most sellers market the business without naming it, using a blind listing or a broker’s private network, and only release identifying detail once a prospective buyer has shown genuine interest and signed a non-disclosure agreement. This protects staff, customers and suppliers from hearing about a sale before it is close to certain, and it filters out casual lookers early.

Interest turns into a letter of intent

Once a buyer has looked closely enough to make a real offer, the two sides typically negotiate a letter of intent that sets out price, structure and key terms in principle. Most of an LOI is deliberately non-binding so either side can still walk away, but the confidentiality and exclusivity clauses inside it usually are binding, and they shape everything that follows.

The buyer verifies what you told them

After the LOI, the buyer and their advisors dig into the financial statements, contracts, employees and liabilities to confirm the business is what it was represented to be. This is a distinct phase with its own pace and its own risk of derailing the deal, and it runs partly in parallel with the next stage rather than strictly before it.

The purchase agreement replaces the LOI

Lawyers draft and negotiate a definitive purchase agreement covering representations, warranties, indemnities and the conditions that still need to be satisfied before closing, such as financing approval or a landlord’s consent. This document, not the LOI, is what actually binds both sides to complete the sale once it is signed and its conditions are met.

Closing and the handover after it

Closing itself is mostly administrative: final confirmations, signatures, and money moving once every condition has been satisfied or formally waived. What follows is a transition period, often defined in the agreement, where the outgoing owner introduces the buyer to staff, customers and suppliers and hands over the knowledge that never made it into a document.