Guides for owners · 9 min read

How to sell a small business in Canada: a step-by-step guide

By Colton Doan, founder of Sellvara · Updated October 30, 2026

Most owners sell a business once in their life. There's no practice run, and the decisions you make in the first few months, like how you set your price, who you tell and when, and how you find buyers, shape the result more than anything that happens at the closing table.

This guide walks through the whole process for a typical Canadian small or medium business, in the order it usually happens. Each step links to a more detailed guide where one exists.

Step 1: Decide why you're selling, and when

Buyers will ask why you're selling, and "I'm ready to retire" is one of the best answers you can give. It's honest, common, and it doesn't suggest anything is wrong with the business.

Before you do anything else, decide:

• Your timeline. Most sales take 6 to 12 months from first preparation to closing, and many take longer. If you want to be out in a year, start now.
• What you want after the sale. Some owners want a clean exit. Others are open to staying on for a few months to train the buyer, or longer as a consultant. Being flexible here usually makes the business easier to sell.
• What matters besides price. Keeping your staff employed, keeping the business in the community, or selling to someone who will keep the name can all matter as much as the number.

Step 2: Build your team early

The best time to involve your accountant and lawyer is before you talk to any buyer, not after you've agreed on a price.

• Your accountant (CPA) can clean up your financial statements, work out your seller's discretionary earnings, and explain how the sale will be taxed. In Canada, the way a sale is structured can change how much you keep by a large amount.
• Your lawyer will review the letter of intent, negotiate the purchase agreement, and make sure you're protected after closing.
• A financial planner can show you how the proceeds fit into your retirement.

If you already have advisors you trust, use them. They know your business and your situation better than anyone you'd meet for the first time.

Step 3: Get your business ready

A business that's easy to understand is easier to sell, and usually sells for more. In the months before you list:

• Get three years of clean financial statements, and make sure your tax filings match them.
• List your add-backs: personal or one-time expenses the business pays that a new owner wouldn't have.
• Put key customer, supplier and lease agreements in writing, and check whether they can be transferred to a buyer.
• Reduce how much the business depends on you personally. Buyers pay more for a business that runs without its owner in the room every day.

Our 12-month checklist breaks this down month by month.

Step 4: Work out what it's worth

Most small businesses in Canada are valued as a multiple of earnings. For owner-operated businesses, that's usually seller's discretionary earnings (SDE). For larger businesses with a management team, it's usually EBITDA. The multiple depends on the industry, how stable the earnings are, and how much the business depends on you.

A realistic price matters more than a high one. Overpriced businesses sit on the market, and buyers start to wonder what's wrong with them.

Read how small businesses are valued in Canada, or try our free valuation calculator for a starting range.

Step 5: Decide how you'll find a buyer

You have three main options:

• Hire a business broker, who markets the business and manages the process for a commission.
• Sell it yourself, usually to someone you already know: an employee, a family member, a competitor or a supplier.
• Use an online marketplace, listing the business yourself while your own accountant and lawyer guide you.

Each has trade-offs in cost, reach and control. Our guide to whether you need a business broker compares them honestly.

Step 6: Market the business without giving it away

Telling the world your business is for sale can unsettle employees, worry customers and alert competitors. Most sellers start with a blind listing, which describes the business without naming it, and only share details with buyers who have signed a non-disclosure agreement (NDA).

See how to sell your business confidentially for how to manage what you share and when.

Step 7: Screen buyers and accept a letter of intent

Not every interested buyer is a serious one. Before you share detailed financials, ask about their experience, why they want the business, and how they'll pay for it.

When a buyer is ready to make an offer, it usually comes as a letter of intent (LOI). It sets out the price, the structure, how the buyer will pay, how long due diligence will take, and any conditions. Most of the LOI isn't legally binding, but it sets the terms everyone negotiates from, so have your lawyer review it before you sign.

Step 8: Choose between an asset sale and a share sale

In Canada, a business is usually sold in one of two ways:

• Asset sale: the buyer buys the business's assets (equipment, inventory, customer lists, goodwill) and the seller's company keeps any liabilities it doesn't transfer. Buyers often prefer this.
• Share sale: the buyer buys the shares of the corporation, taking the whole company, including its history. Sellers often prefer this, partly because of tax.

If your business is a corporation and your shares qualify, a share sale may let you use the lifetime capital gains exemption on part of your gain. Whether you qualify depends on detailed rules, so this is a question for your accountant early in the process, not at the end.

Step 9: Get through due diligence

Once the LOI is signed, the buyer checks everything: financial records, tax filings, contracts, leases, employees, permits, and any legal issues. Expect detailed questions and document requests. This usually takes 30 to 90 days.

The best way to get through due diligence quickly is to have prepared for it in Step 3. Surprises at this stage are the most common reason deals fall apart or prices drop.

Step 10: Close the sale and hand over

Your lawyer and the buyer's lawyer prepare the purchase agreement and closing documents. At closing, the money changes hands, usually through the lawyers' trust accounts. Part of the price may be paid later, for example through a vendor take-back, where you lend part of the price to the buyer and they pay you back over time.

After closing, most sellers spend some time helping the new owner: introducing them to key customers and suppliers, and passing on what they know. A good handover protects your reputation, and any money you're still owed.

Common questions

How long does it take to sell a small business in Canada?

Most sales take 6 to 12 months from preparation to closing, and many take longer. Preparing the business beforehand, ideally a year or more, usually leads to a faster sale and a better price.

Do I need a lawyer and an accountant to sell my business?

Yes. An accountant helps with your financial statements, valuation and tax planning, and a lawyer reviews the letter of intent and negotiates the purchase agreement. Involving them early usually saves money and protects the price.

Can I sell my business without a broker?

Yes. Many owners sell to someone they know, or list the business on a marketplace while their own accountant and lawyer guide them. A broker can save you time, but charges a success fee.

How Sellvara fits in

Sellvara is a Canadian marketplace built around these steps. You can estimate your business's value, list it privately so buyers see only a category, a region and a revenue range, and share details only with buyers who have signed an NDA and been approved by you. Your own accountant, lawyer and other advisors can be part of the process from the start. Sellvara serves owners in every province and territory except Quebec, and listing is free during our launch period.

This guide is general information, not legal, tax or financial advice. Every sale is different: talk to your own accountant and lawyer before you decide.