How to sell your business?

Selling a business is a pivotal stage in an entrepreneur's life. Whether you're planning your retirement, passing the torch to the next generation or redirecting your investments, this step requires rigorous preparation and a well-structured strategy.

To make the most of your sale, you need to combine a strategic vision with regulatory compliance. That's why our experts have produced this guide to help you draw up a plan for selling your business.

1. Preparation

Before you begin the sales process, careful preparation is the key to success. This is a strategic step that not only increases the perceived value of your business, but also facilitates negotiation and secures the transaction in the long term.

Setting your objectives

Before taking any steps, you need to clarify your motivations and expectations. Do you want to withdraw gradually, maximise the sale price, ensure continuity for your employees or facilitate a family succession?

These choices directly influence the strategy to be adopted and the structure of the transaction.

Defining your financial and personal objectives also enables you to anticipate the tax and inheritance consequences: capital gains tax, reinvestment or inheritance.

Organising key documents

Transparency and rigorous documentation are a guarantee of confidence for buyers. Before you go to market, gather together and update your financial, legal and administrative documents:

• Financial statements for the last three years;

• Tax returns, contracts and leases in force;

• Corporate registers and minutes of meetings;

• Business plan, projections and management organisation chart.

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Optimising performance and independence

A well-structured, successful business attracts more buyers. So take the time to :

• Resolve operational inefficiencies;

• Diversify the customer base to reduce dependence on a few major clients;

• Delegate key responsibilities to make the business less dependent on your day-to-day presence.

Review the legal and administrative aspects

An in-depth legal review can help you avoid obstacles during the sale. The experts at Mallette recommend :

• Check the validity of commercial contracts and operating licences;

• Identify restrictive clauses or litigation risks;

• Review shareholder agreements, leases and partnership agreements.

Our legal and tax experts ensure that all documents are up to date and comply with current regulations, so as to avoid any legal issues that could delay or compromise the transaction.

2. Assessment

Once your business is well prepared, the next step is to value it. Determining the fair market value of your company is not just a simple accounting calculation. It is an exercise in financial, economic and strategic analysis that directly influences the success of the transaction.

Have the value estimated by a professional

A rigorous valuation of your business is the foundation of a successful sale. It helps to determine a realistic price, avoid undervaluation and build trust with buyers from the outset.

The most common methods include :

• Net asset value: for companies with significant equipment, buildings or inventories.

• The discounted cash flow method (DCF): based on anticipated future earnings.

• The market comparables method: based on recent transactions in the same sector.

Mallette's experts use a multidimensional approach that combines financial analysis, sector context and competitive positioning. This expertise results in an objective valuation that is recognised by financial institutions and investors.

Create a solid sales pitch

A numerical valuation is not enough: you need to be able to showcase your business. A well-structured sales pitch can make the difference between a simple proposal and a successful transaction.

Your presentation pack (or seller pack) should highlight:

1. The company's strengths: unique expertise, market share, financial stability;

2. Performance indicators: sales growth, profitability, customer loyalty rate;

3. Future opportunities: innovations, geographical expansion, partnerships.

This document becomes a genuine negotiating tool, demonstrating not only the company's current value, but also its growth potential.

Including the tax dimension in the valuation

Valuing a business cannot be separated from tax planning. The method of sale you choose (sale of assets or sale of shares) will have a major impact on the net price you receive after tax.

A tax expert will analyse your situation to :

• Identify the most advantageous corporate structures;

• Evaluate the tax implications of capital gains;

• Take advantage of available exemptions, such as the capital gains exemption on the sale of qualifying small business shares (QSBS).

3. Finding buyers

Having assessed the value of your company, the next step is to find the right buyer. This phase requires discretion, strategy and professional guidance, because it determines the quality of the offers you receive and the smoothness of the sales process.

Calling on transaction experts

Finding a buyer can be a long and complex process, especially when it comes to maintaining confidentiality while maximising the company's visibility to qualified investors.

That's why it's highly recommended to work with a firm specialising in mergers and acquisitions.

These experts support managers in :

• The confidential marketing of the company;

• The identification of strategic buyers in Canada and internationally;

• The preliminary negotiation of financial terms;

• The management of confidentiality agreements (NDA).

This approach preserves your company's internal stability while ensuring a rigorous and secure sales process.

Identifying potential buyers

Not all buyers are created equal. You need to target those who share your vision and are capable of ensuring the company's continuity.

The most common profiles are :

• strategic buyers, such as competitors, suppliers or partners;

• financial investors (funds, private equity groups);

• internal or family buyers, particularly in business succession contexts.

Using the right distribution channels

Finding the right buyer also depends on a targeted, controlled advertising strategy. Several channels can be used:

• Professional networks and chambers of commerce;

• Specialized platforms (e.g., Repreneuriat Québec, business marketplaces);

• Internal networks: customers, business partners, key employees.

4. The negotiation

Once the buyers have been identified, the negotiation phase marks the heart of the sales process. This is when the financial, legal and human aspects of the transaction come into play.

Rigorous preparation

Before entering into discussions, take the time to prepare your arguments and data. The strength of your position depends on clear and complete documentation: financial statements, business valuation, up-to-date contracts and budget forecasts.

Also determine your tolerance thresholds:

• The floor price below which you will not sell;

• Acceptable payment terms (cash, deferred payment, shares, earn-out);

• Non-negotiable conditions related to the continuity of the business or staff.

Negotiating calmly and strategically

Negotiating a business isn't just about price, it's also about trust between buyer and seller. To maintain a constructive climate :

• Base your arguments on objective data (professional assessment, financial ratios).

• Stay focused on your initial objectives and avoid hasty concessions.

• Rely on your advisors (accountant, legal expert, tax specialist) to defend your interests without tension.

Professional support allows you to retain control of the process, while preserving the relationship with the future buyer.

Formalise the agreement with a letter of intent

Once the basic terms have been agreed, the letter of intent (LOI) formalises the preliminary agreement between the parties.
This document specifies in particular:

• The price offered and payment terms;

• The transaction timetable;

• The conditions precedent (due diligence, financing, legal approvals).

Although the letter of intent is not a deed of sale, it is an important legal basis for the rest of the process.

5. Finalisation

After months of preparation, evaluation and negotiation comes the decisive stage: finalising the sale. This phase marks the official conclusion of the business transfer, but also the start of a new phase for both seller and buyer.

Conducting due diligence

Before signing, the buyer will carry out a full due diligence to confirm the value and compliance of the business.

This in-depth review covers :

• The financial statements and cash flows;

• The legal and contractual obligations (leases, contracts, licences);

• The tax and regulatory records;

• Potential risks: litigation, debt, environment, human resources.

Drawing up and signing the deed of sale

Once the verification has been completed, the deed of sale formalises the transfer of ownership. This document can be signed under seing privé (between the parties) or in form authentique (before a notary), depending on the nature of the business and the type of transaction.

The deed of sale must specify :

• The final price and payment terms;

• Asset and liability warranties, protecting both parties against unforeseen circumstances;

• Non-compete or confidentiality clauses;

• The timetable for the transfer of securities, licences and assets.

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A corporate lawyer oversees the drafting, validation and signing of these documents, ensuring that the seller's interests are fully protected.

Planning the after-sales service

A successful transaction does not stop at the signing. Post-sale planning ensures the continuity of the business and takes full advantage of the results of the sale.

It is therefore important to be well prepared:

• The transition with the buyer, including a period of support, knowledge transfer and training;

• The management of funds from the sale, whether for investment, reinvestment or estate planning;

• Post-transaction tax optimisation, to reduce taxation and plan for retirement with peace of mind.

Selling your business with confidence

Selling a business in Quebec requires rigorous preparation, a fair valuation and a well-defined strategy. Every decision has a direct impact on the final value and success of the transaction.

At Mallette, our experts support managers at every stage of the process, from initial planning to final signature, ensuring rigour, transparency and efficiency.

Our multidisciplinary approach maximises the value of your business while securing the transaction. Contact our advisers for professional support tailored to your objectives.