I Have Never Seen a Better Market…

Canadian moneyDo you own a small- or medium-sized business in Canada? Is selling and retiring on your horizon?

Great news!

In the 15 years I have been in business brokerage, I have never seen a better market for business owners who want to sell and retire or move on to other things in life.

The market is also favourable for buyers.

Here’s why:

  • Real estate, the stock market, and business are all buoyant. We’ve finally recovered from the hard knocks of the 2008 financial crisis.
  • Interest rates are at an all-time low so businesses are now more affordable.
    • Typically a buyer requires the business they buy to
      • a) have sufficient cash flow that they can live comfortably,
      • b) look after the debt servicing, and
      • c) provide a good return on their invested capital.
    • Given that low interest rates have reduced the debt-servicing component, buyers are getting more for their business purchase than a few years ago.
  • The lower Canadian dollar is attractive to people bringing money from other countries; many of our buyers are first generation Canadians.
  • The lower Canadian dollar also makes our medium- and higher-sized businesses (businesses over $3 million in revenue) especially attractive to international investors, particularly those from the U.S.For private equity groups, they’re a bargain.
  • Changes to the lifetime capital gains exemption (LCGE) for small business corporation shares reduce taxes for owners who meet the CRA criteria.
    • The LCGE for 2015 is $813,600;
    • The LCGE is indexed to inflation, up to $1 million, for tax years after 2014;
    • Many businesses are owned by a family trust or by multiple members of a family. The exemption applies to each member.

Next steps

A professional appraisal will tell you what your business is worth and its most probable selling price (MPSP). If it’s not worth what you expect or need, you may need to work on your business to increase its value. Our brokers can also help in that respect, identifying the financial, operational and organizational factors that have the most impact. The same applies to minimizing the taxes you’ll pay when you sell—we can refer you to tax advisers familiar with the options to best meet your needs.

Take the first step. Reserve a free, confidential consultation at an office near you.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s