As a business broker, one of the most common challenges I encounter when preparing a business sale is owner dependency. Too often, the owner is the business, the face, the decision-maker, the technician, and the customer service liaison. While this dedication may have built the company’s success, it can significantly reduce its market value and make it much harder to sell.
Let’s break down why this happens and how you, as a business owner, can begin to transition from being indispensable to strategically absent.
Why Owner Dependency Is a Deal Breaker:
When buyers evaluate a business, they’re not just looking at cash flow or assets, they’re looking for a sustainable operation. If the owner is deeply embedded in daily functions, the business appears risky. What happens after the owner exits? Will clients leave? Will operations stall? Is there a knowledge gap that no one else can fill?
Simply put: The more your business relies on you personally, the less attractive it is to outside buyers. They want systems, teams, and processes in place, not a one-person show.
Signs Your Business Is Too Dependent on You:
If any of these sound familiar, don't worry you're not alone, and it can be fixed.
How to Start Letting Go Without Losing Control:
The Payoff: A More Valuable, More Sellable Business:
When you reduce owner dependency, several things happen:
In essence, you’re starting to build a business that’s not just sellable, but scalable for a new buyer.
Final Thought:
Letting go of control is tough, especially when your business is a reflection of decades of hard work. But from a broker’s standpoint, the businesses that command the best prices, sell the fastest, and create the most options for their owners are the ones where the team and systems, not the owner, keep the engine running. Your exit strategy starts long before you list your business. And the first step is learning how to get out of your own way.
Need help preparing your business for sale? Let’s talk. Whether you’re 12 months or 3 years from listing, planning ahead could mean the difference between walking away with a life changing cheque or walking away with regret. At Alberta Business Sales, we specialize in helping business owners successfully navigate the complex process of selling their business. From maximizing value to minimizing stress, our team of experienced brokers is here to support you every step of the way. Reach out today here.
Jeff Couch Business Broker, Alberta Business Sales & Commercial Ventures
I recently closed on the sale of a business for one of my clients. It was a smaller transaction, under $1 million dollars. This was the first-time the seller had ever sold a business and the buyer was also a first-time buyer. As a business broker, what I have learned is that no two transactions are ever alike. You are dealing with different personalities, industries, situations, and the list goes on and on. Even selling two different businesses that are in the same industry will most likely feel like completely different transactions. What I can say however, is at the end of the day as a broker you are always trying to act in your client’s best interests and of course make sure you are serving them to the best of your abilities. There are many reasons that a client may wish to entertain a certain offer. It is vitally important the details are reviewed and that your clients fully understand any of the potential challenges or red flags that may lay ahead.
This brings me to my recent closing. The seller and buyer were known to each other and they each had their reasons for wanting to work together. Initially, I wrote the Letter of Intent for the buyers which they then reviewed with their advisors. After their review, they kindly informed me that they were going to have a new offer written. If a buyer wishes to have their own LOI or offer to purchase done, I am fine with that, but I usually know this can create a few more twists and turns and some potential inefficiencies along the way.
In this case, the new LOI was quite straight forward. Very simple purchase structure, with clear conditions and expectations for both the Vendor and Purchaser. It should be a very good guiding document for the transaction as we all march towards the closing date. We should be good to go right? There was one item however that left me confused and upon asking the buyer and their advisors about it, they were adamant that this would not be changed. There was a clause stating the final Purchase Sale Agreement would be executed within 10 days of the signing of the LOI. This meant that before any due diligence was preformed, financing had been applied for or any other purchase conditions were investigated by the buyers and their team, that the terms of the Final Agreement were going to be written and agreed to? For any other Brokers out there or individuals who have been through drafting a buy/sell agreement, as you know, doing this in 10 days would be a daunting task much less trying to accomplish this before a lot of the final sales details are even known? This made me question the motivations of why the buyer was being guided to try and execute the transaction in this order.
As mentioned, there were valid reasons that my clients and I discussed of why the offer was in their best interests and why they chose to accept it. What I always try to inform both sellers and buyers is to remember that YOU are in charge of the transaction. You are always in the driver’s seat. It is up to you to remind your advisors what you want to do and how you want to go about it. Buying or selling a business will take many twists and turns, but how you go about the process will also determine how efficient and organized the transaction will unfold. Selling or buying a business is also not cheap and I am sure you will want to manage costs as best as possible. It involves a team of people who will all need to be involved to do their part. In this case, because the LOI stated the Final Purchase Agreement would be executed within 10 days of signing, this meant both parties immediately started incurring costs they could have avoided before they had any idea if conditions of the sale would be met or financing for the business would be approved? Kind of sounds like a backwards way to go about it right?
This transaction did prove successful and we did reach closing. Would I allow something similar to happen again in the future? That depends. In this case it was the right decision and both my clients and their buyer are very happy with the outcome. Could it have happened differently and been more cost effective? Absolutely. I’ll also take the time to congratulate them all for their cooperation and communication through the process and I wish the new buyers the best of success as they enter into entrepreneurship and grow a business they are extremely passionate about!
Jay Barrett Business Broker, Alberta Business Sales and Commercial Ventures
Throughout my working life I never aspired to being a Business Broker – I didn’t even know it was potential job opportunity! Here's how it happened, and why I am now passionate about helping other entrepreneurs make the most of their businesses—just like I did.
Selling My Business: The First Step
A few years ago, my husband and I made the decision to sell our business. It wasn't a choice we made lightly, but after much reflection and planning, we realized it was time to move on. The next step was figuring out how to sell it. Exit planning was our new ‘job’ – trying to navigate options and emotions surrounding such a change!
The answer became clear: We needed help. I asked accountants, I asked a lawyer, I googled and googled and googled! The questions kept piling up instead of being answered. Surely there must be someone out there who can give us a better idea of where to start!
Once we found a business broker - the experience was an eye-opener. The broker we worked with not only helped us understand the nuances of selling our business, but also showed us the behind-the-scenes work that went into finding the right buyer, negotiating terms, and closing the deal. It was more intricate and demanding than I had imagined, but the expertise of a broker made it all possible.
The buyers that ghosted us, the buyers who had no money (!?!), the buyers who wanted us to take all the risk in handing over our ‘baby’. The emotions ran high, and there were days I would have sold for $10 just to make it all go away!
Thankfully, we had a professional to guide us, and ensure we maximized our value in the transaction.
Why I Decided to Become a Broker
Throughout the process, I realized something: the value of a skilled broker isn’t just in the sale, but in the entire journey of business ownership. A good broker doesn’t just help you sell your business, they help you optimize its value and ensure you get the best deal possible. The benefit of having that ally fascinated me.
As a former business owner, I understood firsthand the emotional, financial, and strategic aspects of running and eventually selling a business. I felt I could provide that same level of insight to others in similar situations. I had seen how brokers operate, the challenges they face, and how much of an impact they can make on a business owner's future.
It wasn’t long before I decided to pivot my career. My history and experience in business consulting, accounting, and finance made the transition easy. I started preparing and learning from the very experts that I spent the previous two years working with, but on the other side of the fence! The world of mergers and acquisitions, business valuations, and deal-making quickly became my new passion.
The Transition to Being a Broker
Becoming a broker wasn't an overnight transformation. I quickly realized that while the knowledge of business ownership gave me an edge, being a good broker required honing my skills differently—negotiation, networking, and market analysis.
Every business is unique, and every deal requires a personalized approach. As I worked with more clients, I find myself tapping into my past experience as a business owner to better empathize with their situations and guide them through the intricacies of selling. The satisfaction of helping someone achieve their business goals is incredibly rewarding.
The Rewards of Being a Broker
The work I do now as a broker allows me to combine the lessons I learned as a business owner with the new knowledge and skills I’ve gained. I love the challenge of helping entrepreneurs achieve successful exits. It's not just about making a sale; it's about understanding the client’s needs, finding the right buyer, and making sure everything aligns for the future of both parties involved.
Perhaps the most gratifying part is seeing my clients walk away from the sale with the financial security and peace of mind they deserve. As a former business owner, I know how important it is to get the right deal, and as a broker, I get to make that happen for others.
Final Thoughts
Making the leap from business owner to broker wasn’t something I had planned, but it’s been one of the most rewarding decisions of my career. If you’re thinking about selling your business - know that it’s a journey that requires both a deep understanding of business and the willingness to embrace new challenges.
The experience of selling my business opened my eyes to an entire industry that I’m proud to be a part of. And now, as a broker, I’m able to help others write their own success stories.
If you're thinking about selling your business, I’d love to chat and share more insights.
________________________________________
I hope this helps others see the potential in both selling and brokering businesses—there's more to it than just financial transactions; it's about helping people move to the next chapter in their journey.
Chantelle Jacobs Business Broker, Alberta Business Sales and Commercial Ventures
Buying or selling a business? Congrats! Now comes the fun part—due diligence. Alright, maybe "fun" isn't the right word, but it’s absolutely necessary. Think of it as inspecting a used car before you buy it—except instead of kicking the tires, you’re kicking the financials, legal contracts, and operational risks. Let’s break it down.
1.Have a Game Plan
Due diligence isn’t a race—it’s a marathon. Expect it to take one to three months, during which the buyer will scrutinize every detail of the business. The Letter of Intent (LOI) sets the stage, outlining what’s being reviewed and granting access to records, key employees, and even the office coffee machine (maybe).
Before diving in, buyers should ask:
Raising concerns early avoids last-minute drama (and trust me, no one likes last-minute drama in business deals).
2. Assemble the A-Team
You wouldn’t fix your own plumbing unless you’re a pro, right? The same logic applies to business deals. Surround yourself with experts:
Having pros on board saves you from headaches (and expensive mistakes).
3. Dig Into the Details
Due diligence comes in three flavors:
a. Commercial Due Diligence (a.k.a. “How Does This Business Actually Make Money?”)
b. Financial Due Diligence (a.k.a. “Show Me the Money”)
c. Legal Due Diligence (a.k.a. “Avoiding Lawsuits 101”)
4. Why Sellers Should Be Ready
Sellers, don’t get caught off guard! Having everything organized can:
And just like buyers are assembling their team of experts, sellers need to rally their own crew. That means getting your accountant, lawyer, and any other key advisors prepped and ready for action.
Not sure when to bring them into the mix? That’s where a business broker comes in handy. They can loop in your team at the right time and help ensure a smooth transition. Think of them as the quarterback calling the plays—so you can focus on selling your business instead of fumbling through paperwork.
A business broker can help get your ducks in a row before buyers start asking the tough questions.
5. Close Smart and Minimize Surprises
No deal is 100% risk-free, but good due diligence minimizes “uh-oh” moments after closing. Buyers can negotiate seller guarantees, while sellers can use organized records to justify pricing and keep the process moving smoothly.
At the end of the day, due diligence is about making smart, informed decisions—not just crossing fingers and hoping for the best. With the right team, preparation, and a bit of patience, you’ll be on your way to a successful business transition (and hopefully, some well-earned champagne afterward).
Heather Miller General Manager, Alberta Business Sales and Commercial Ventures
When it comes to selling a business in rural Alberta, business owners face a unique set of challenges. Smaller communities present different market dynamics that require careful planning, strategy, and expertise. At Alberta Business Sales, we specialize in helping business owners navigate these complexities to ensure a successful and rewarding sale.
Let’s explore the distinct challenges of selling your business in smaller markets:
How Alberta Business Sales Adds Value and Solutions
At Alberta Business Sales, we understand the unique dynamics of smaller communities and offer tailored solutions to overcome these challenges. Here’s how we help:
Smaller cities offer distinct advantages for buyers:
Selling your business in a smaller city does not have to be an uphill battle. With the right partner, you can navigate the challenges, unlock hidden opportunities, and secure the best possible outcome for your hard-earned investment. Alberta Business Sales works with you to craft a compelling story that highlights these benefits and attracts the right buyer.
Andrew Earle Broker, Alberta Business Sales and Commercial Ventures
Client Overview
Alberta Business Sales (ABS) worked with a small digital marketing company that specialized in providing SEO, social media management, and content marketing services. With a well-established client base and a reputation for delivering results, the business was positioned for growth but required new ownership to reach the next level.
The Buyer
The buyer was an entrepreneur in the same industry, running a business that offered complementary services such as web development and pay-per-click (PPC) advertising. They saw the acquisition as an opportunity to expand their offerings and provide a one-stop solution to clients of both businesses.
The Challenge
Although the business had strong financials and a loyal client base, the buyer market in the digital marketing space is often price-sensitive. Securing the seller’s asking price required careful negotiation and a deal structure that would appeal to the buyer. As a service-based business with limited tangible assets, securing bank financing for this purchase presented a significant challenge. Currently, most financial institutions show limited appetite for businesses of this nature or size.
The Solution
ABS identified early in the process that flexibility in deal structure could be a key factor in securing the asking price. Working closely with the seller, ABS proposed incorporating a seller financing arrangement to support the goodwill portion of the business. This demonstrated the seller's confidence in the business's continued success under new ownership and reduced the buyer's upfront financial burden. The transaction was structured with a combination of cash at closing and seller financing, accounting for 100% of the deal. This approach provided the seller with a more secure position, as they were not subordinate to any senior debt that might have otherwise been involved.
The Outcome
The deal closed with the seller receiving their full asking price, thanks to the balanced structure that included seller financing for a portion of the goodwill. Both parties benefited from the arrangement:
Key Takeaways
Conclusion
This case highlights the importance of flexibility and strategic alignment in successful business sales. Alberta Business Sales is proud to have facilitated this win-win transaction, enabling both buyer and seller to achieve their objectives while ensuring the business’s continued growth.
Heather Miller General Manager, Alberta Business Sales and Commercial Ventures
Jay Barrett Broker, Alberta Business Sales and Commercial Ventures
Working as a business broker has given me the chance to witness firsthand the intricate, emotional, and multifaceted world of business ownership transitions. Every deal is unique, and every client has left an impression on how I approach this profession. Here are some key lessons I’ve learned, based on real-world experiences.
1. The Importance of Flexibility: Navigating the Emotional and Practical Aspects
Selling a business is not just a financial transaction—it’s deeply personal. Business owners often view their companies as extensions of themselves, having invested countless hours, resources, and emotional energy into building them. Therefore, when it comes time to sell, there is often a natural resistance to certain changes or suggestions, particularly regarding price or business valuation. Fear of the unknown can lead to rigid stances on key elements of the deal.
For instance, I’ve learned that many sellers start out with a strong belief in a fixed sale price, largely influenced by their emotional attachment to the business or preconceived ideas about its worth. While confidence in your business is important, so is flexibility. Market conditions, buyer perceptions, and deal structure flexibility can all play a significant role in closing a successful transaction. In one deal, for example, the buyer proposed an earn-out structure—where part of the payment is contingent on the business’s future performance. While this initially seemed risky to the seller, it ultimately provided a solution that aligned with both parties’ goals. Flexibility in deal structures such as this can bridge gaps in price expectations and ease concerns about business continuity post-sale.
Another area where flexibility is crucial is in receiving and accepting feedback. A buyer may perceive the business differently than the seller, identifying areas of improvement or potential risks that hadn’t been previously considered. For the seller, hearing critiques about something they’ve built can be difficult, but it’s essential to separate emotions from business. What may seem like harsh criticism is often an opportunity to better position the business for sale and may reveal aspects that enhance the value in ways previously overlooked. Being open to this type of feedback is often the difference between a prolonged listing and a successful sale.
2. Documentation and Organization: Preparing for Buyer Scrutiny
One of the most common challenges I’ve encountered is the lack of organized, clear financial records and essential business documents. Business owners are often so focused on the daily operations—keeping clients happy, managing staff, and handling the never-ending stream of tasks—that administrative duties like organizing financials or updating legal documents take a backseat. While understandable, this can create significant barriers when it’s time to sell.
Buyers often make decisions based on clear and easily digestible financial data. In many instances, however, sellers are unprepared to present up-to-date financials, corporate minute books, or accurate asset and inventory lists. A buyer’s due diligence process hinges on having access to this type of data to validate the seller’s claims about the business’s profitability and future prospects.
To give an example, I’ve seen potential deals slow to a crawl simply because the business’s financial statements were disorganized, or worse, incomplete. It’s not just about having a profit and loss statement; it’s about ensuring these numbers are consistent and verifiable. Buyers want to see stability over time, and discrepancies or missing information create doubt. An ounce of preparation truly does go a long way in expediting the process and increasing a buyer’s confidence.
Statistically, businesses that present organized financial data can reduce the time spent on due diligence by nearly 50%. In a market where many buyers are looking for quick, clean acquisitions, the readiness of these documents can be the difference between closing a deal in three months or losing buyer interest altogether.
3. Business Owners Want a Partner: More Than Just a Transaction
Selling a business can often feel like stepping into uncharted territory for most owners. The uncertainty around valuation, deal structure, and the future of their business post-sale creates stress and anxiety. Many owners I’ve worked with aren’t just looking for a transaction—they’re looking for someone to be there with them, to help guide and reassure them through the process.
This is one of the reasons why, at Alberta Business Sales, we pride ourselves on truly being in the trenches with our clients. Selling a business is a complex, multi-step process, and business owners appreciate having someone to turn to when obstacles arise. A business broker's role isn’t just to find buyers; it’s to stand by the seller, helping navigate negotiations, identifying potential pitfalls, and providing clarity in what can often feel like a sea of confusion.
I’ve seen many instances where sellers initially feel overwhelmed by the sale process but later find relief in knowing they have a team guiding them step-by-step. Whether it’s explaining market trends, walking through deal structures, or simply providing emotional support during those tough conversations, being in the trenches with our clients is what ultimately builds trust and gets deals done. According to industry data, businesses sold through brokers that offer comprehensive support are 2-3 times more likely to close compared to businesses sold without professional assistance.
In conclusion, selling a business is never just about numbers. It’s a deeply personal process, and every client has taught me the importance of flexibility, preparation, and partnership. If you’re considering selling your business and don’t know where to begin, know that you don’t have to do it alone. Let’s roll up our sleeves and get in the trenches together. After all, you’ve already done the hard part of building your business—now, let’s make sure you get the reward for all that hard work.
Heather Miller General Manager, Alberta Business Sales and Commercial Ventures
When selling a business, owners can often feel defensive about how potential buyers assess and value the company. This is understandable, as many owners have spent years—sometimes their entire careers—building a business that supports them. Receiving an offer that seems lower than expected can be difficult for an owner to accept, as it doesn’t always align with their personal sense of the business’s worth. So, how do buyers and sellers come together to agree on a fair price?
Key Factors in Determining Business Value:
Many factors play a role in determining a company's value, but one of the most critical metrics is EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA focuses on a company’s primary earnings by excluding debt costs, taxes, and non-cash items like depreciation and amortization. Essentially, it measures how much money a company makes from its regular operations, without considering external financial factors.
Not only is EBITDA a useful tool for buyers in determining a business’s profitability, but lenders also rely on it to gauge whether the company can meet future debt obligations.
Why Owners Should Understand EBITDA Adjustments:
It’s essential for business owners to know how to calculate EBITDA and account for any necessary adjustments. Adjustments are typically made for non-recurring, non-operational, or unusual expenses, allowing owners to present a clearer picture of the company’s financial health. These adjustments, known as normalizations, help showcase the business's true operating performance.
For example, normalizations could include:
Determining a company’s adjusted EBITDA is crucial for showing potential buyers the company’s core profitability. Buyers often base their offers on a multiple of these earnings, so the more accurately an owner can present and justify their adjusted EBITDA, the better their chances of securing a higher offer.
How EBITDA Differs from Cash Flow:
While EBITDA is a useful measure of operational performance, it’s important to understand how it differs from cash flow. It provides a snapshot of how well a company is doing from an operational standpoint, but it doesn’t account for actual cash moving in and out of the business.
Cash flow, on the other hand, reflects the actual cash generated or consumed by the business over a specific period. It includes operational earnings, but also factors in:
In other words, cash flow provides a more comprehensive picture of the financial health of a company because it considers both operational and non-operational cash movements. While EBITDA may show profitability, strong cash flow is necessary to ensure that a business can meet its financial obligations, reinvest, or return capital to shareholders.
In summary, EBITDA gives an owner and potential buyer insight into a business's profitability, while cash flow offers a broader understanding of the company’s financial flexibility. Both are important in the negotiation process, but it’s essential not to confuse one for the other when assessing value. Determining a business's value is complex and requires evaluating multiple factors, including EBITDA, industry trends, the financial landscape, and the business's location.
For expert guidance on valuing your business, contact Alberta Business Sales today.
Jay Barrett Broker, Alberta Business Sales and Commercial Ventures
In 2023 Calgary has seen a large influx in population growth. This growth is not just from foreign immigration, but mainly inter-provincially with the most popular migrants coming from Vancouver and Toronto. In 2023 Calgary grew by 6%, or 96,000 new citizens; this outpaces all other cities in Canada. So why is Calgary the most popular destination in Canada and what does this mean in the Business Acquisition Industry?
Calgary is known as a major center for the energy industry, providing a stable foundation for the local economy. However, Calgary has diversified beyond energy, and now has an economy encompassing sectors like technology, healthcare, financial services, and manufacturing. Further, as of 2023, Calgary saw a record-high of 15,393 new homes built. This has created ample opportunities in new-home construction and residential targeted industries. The city's continued economic growth and development create ample opportunities for businesses to thrive.
So, what does this mean if you are looking to sell or purchase a business? Quite frankly, it means now is a great time to sell. There are many purchasers with their eyes on Alberta and Calgary and this includes a wide range of types of buyers. From individual and family buyers to private equity groups to strategic buyers who are looking to expand their current operations into a new market. About half of the buyers I work with are Albertans, with the other half coming out of country and out of province. This means many options for you as a seller and a much greater chance to find the right fit to continue your business and legacy.
For a purchaser it’s also great news. A growing market means more options available for purchase. A growing and diversified Calgary means many strong industries to choose from as well as many growth opportunities. Almost all of my current listings that are located in the Calgary greater area are either experiencing single month revenue highs, 5-10% revenue growth year over year and increased profitability as well. There are many long-standing Calgary businesses that are ready for a new owner to take them to new heights. Calgary is a very exciting place to be right now.
If you have been considering selling your business in the Calgary area and need help to navigate the process, reach out today!
Craig Panek Broker, Alberta Business Sales and Commercial Ventures
Selling a business is a significant milestone for any business owner. It can be the peak years of hard work and dedication, but the process can also be challenging. Understanding the common pain points can help business owners prepare better and navigate the complexities of a sale.
Here are some of the most common issues business owners encounter when selling their business:
Buyers also consider non-financial criteria, such as:
5. Transition Planning: Post-sale transition is often overlooked. Ensuring a smooth handover to a new owner is critical for the business’s continuity. This involves training, transferring key relationships, and many times staying on for a period to aid the transition.
A Cautionary Tale: The Importance of Proper Financial Preparation
Over the past 16 years, Alberta Business Sales has seen every type of business, and we can help owners address their concerns as they move to sell their business. One particular case stands out, illustrating the importance of meticulous financial preparation.
John, the owner of a successful manufacturing company, decided it was time to sell. Alberta Business Sales worked with John to find a suitable buyer, and both parties were eager to close the deal. However, when the buyer sought financing, the bank encountered significant issues.
Upon reviewing John's financial statements, the bank found them to be incomplete and somewhat disorganized. Cash flow was not clearly delineated, making it difficult to ascertain the true profitability of the business. There were discrepancies in reported earnings, and some expenses seemed to be missing or inaccurately categorized. Due to these financial irregularities, the bank could not confidently assess the value of the business or project future earnings. This uncertainty led the bank to deny the financing request, as the risk was too high without a clear understanding of the business's financial health.
This setback caused the deal to fall through, leaving both John and the buyer frustrated. This situation could have been avoided with better financial preparation and organization.
Selling a business can be a complex process. Being aware of these common pain points allows business owners to better prepare and address potential challenges. Seeking professional advice and planning thoroughly can help ensure a smoother, more successful sale. By navigating these pain points effectively, business owners can achieve a favorable outcome that honors their hard work. If you have been considering selling your business and need help to navigate the process, reach out today!
Heather Miller General Manager, Alberta Business Sales and Commercial Ventures
