1. Define What You’re Buying
Start with a written acquisition thesis: industry, location, size (revenue and earnings), and the role you want to play. Be honest about the skills you bring. Lenders and sellers both take a focused buyer more seriously than one browsing everything from car washes to software.
2. Search Verified Listings
Browse businesses for sale by province, city and industry. On ExitToBuy, listings are verified before they appear, so you are evaluating checked financials rather than a broker’s summary. Sign the NDA, request the confidential information memorandum, and shortlist.
3. Value the Business
Most Canadian small businesses are priced on a multiple of earnings — Seller’s Discretionary Earnings (SDE) for owner-operated businesses, or EBITDA for larger ones. Normalize the financials (add back the current owner’s discretionary expenses), compare against real transaction multiples for the sector, and separate the value of the operating business from any real estate or surplus assets.
4. Letter of Intent
A letter of intent (LOI) sets out price, structure, key conditions and an exclusivity period. It is mostly non-binding but frames everything that follows — including whether you are buying assets or shares, which has major tax consequences (see step 6).
5. Due Diligence
Verify what you are buying: financial statements and tax filings, GST/HST and payroll accounts with the Canada Revenue Agency (CRA), customer concentration, contracts and leases, employees, and any litigation or environmental exposure. Verified listings shorten this stage, but they never replace your own accountant and lawyer.
6. Structure: Asset vs. Share Purchase
This is the most consequential Canadian decision. In an asset purchase, you buy specific assets and generally step up their cost base and leave most historical liabilities behind — buyers usually prefer it. In a share purchase, you buy the company itself; sellers often prefer it because qualifying shares may let them claim the Lifetime Capital Gains Exemption. Where a going concern is sold, a joint section 167 election can often remove GST/HST from the sale. Structure is negotiated, and it moves real money — involve a tax advisor before you sign.
7. Finance the Purchase
Assemble the capital stack: a CSBFP-backed bank loan for qualifying assets, BDC financing for goodwill or the gap, a vendor take-back from the seller, and your own equity. Our Canadian financing guide explains how these combine and what lenders expect.
8. Close and Transition
Final agreements are signed, funds move through licensed escrow and are released on mutual confirmation, and the seller helps transition relationships, staff and systems. A structured transition — often with the seller staying on for a defined period — is what protects the value you just paid for.