Seller FAQs

Seller FAQs

Why use a business broker?

Man speaking in business meetingOur brokers have the combined experience of having gone through hundreds of transactions. A Chinook Business Broker or Intermediary will help you sell your business by contributing his experience and expertise to the following:

  • estimating the best achievable price for the business,
  • preparing a detailed profile of the business,
  • showing your business to the existing business buyers in our database,
  • strategically marketing your business,
  • supporting and advising through negotiations,
  • effectively managing the critical due diligence phase, and
  • helping you through the inevitable ups and downs that are part of the selling journey.


At Chinook, we work thoughtfully using non-disclosure agreements and the staged dissemination of information to maintain your anonymity and confidentiality. Lack of confidentiality can be devastating to employees, customers, suppliers, and ultimately the sales price.

Large Potential Buyer Pool

Business brokers and intermediaries can market your business to a large pool of potential buyers, both domestic and international.

Objective View and Advice in Negotiation

Business brokers have an objective view of your business and can understand the needs and expectations of both seller and buyer. Additionally, good brokers are not emotionally attached to the business and have had experience with negotiations between parties to achieve mutually beneficial outcomes.

Saving the Seller Time

It takes time to inform, screen and qualify buyers which can seriously detract a seller from operating their business. Most business owners don’t know what information to have ready for a potential buyer. A buyer who must wait for this information will likely walk away. A business broker can help the seller gather and present important business information, and assess potential buyers for their financial and other capabilities.

Bigger Returns

Using all this experience and expertise a Chinook Business Broker or Intermediary will typically be able to achieve a higher value for your business in a transaction. We almost always more than pay for ourselves.

How long will it take to sell my business?

Smaller businesses that are priced correctly can sometimes be sold in as little as three months. Most of the time, even with correct pricing, it takes 9 to 15 months to sell a business. Although this may sound like a lot of time, the complexities involved in the transaction, including listing the business, finding potential buyers, interviewing potential buyers, writing contracts, obtaining financing, due diligence, and the closing process are all time consuming. Each step can cause delays if the buyer and the seller are not willing to compromise. Owner financing can help speed up the process.

Do I need an attorney or an accountant?

Buying or selling a business is one of the most complex transactions that business people encounter. It is possible to do it without professional advisors. However, Chinook strongly recommends that both buyer and seller have their own experienced professional advisors for the transaction.

Buying a business should be a team approach. The selection of the advisors is critical to the success of the acquisition. Attorneys and accountants that do everything are not the best choice. It is best to find ones that have recent experience in the purchase or sale of a business.

Legal and accounting fees can be significant. Ask each of your advisors for an estimate of their cost. Some attorneys and accountants will work for a fixed fee for a specific piece of work.

Will I have to sign a non-compete agreement?

Yes. Generally, the non-compete agreement covers the area from which your current customers are generated and the period equals the term of the financing you are providing to the buyer. For example, if your customers come from a 30-km radius of your business and you are providing the buyer with a five-year loan, you will be asked to sign a non-compete agreement for a five-year period, covering a 30-km radius from your business.

How much will I owe in taxes for the sale of my business? Can I minimize these taxes?

It depends. In fact, it depends on so many things that you should consult with your accountant and probably a tax professional as well. The tax laws are complex and the strategies available to you are vast. A small investment in some high level advice will make a big difference for you and your family.

How do I include unreported income in the value of my business?

Chinook recommends businesses report all income and comply with all tax laws. Buyers place high confidence in financial results that are supported by filed tax returns. If you won’t show money to the CRA, a buyer will not be able to see it and you will not get paid for it.

Should I have a business valuation done?

Yes. Though not required, it is strongly recommended. Chinook will, at no charge, give you an estimate of a probable selling price. Knowing what you may get financially from the sale of your business is critical in deciding on how you can move forward with your life. Business values are based on the ability of the business to generate cash flow, its assets, its reputation and the relative risk of the business. A valuation can help assure you that you are selling at a fair price.

At what price should I sell my business?

This is a complex question, but ultimately the answer is this: the value of a business is what a buyer is willing to pay. It is not the value given to you by an attorney, an accountant, a consultant, or someone else. Pricing your business too high will scare away potential buyers and significantly lengthen the time to sell the business. Selling it at too low a price is almost as bad. We want you to get what you deserve for all those years of hard work. It is important to have a fair price with reasonable terms.

Keep in mind that a buyer must achieve three things when buying a business: earn a living wage, make enough money to repay debt they incurred to buy the business, and a receive a return on the money they put into the deal. If your price cannot support those three things, it is unlikely you will find a buyer.

I own the property on which my business is located. Do I have to sell it as well?

No. In fact, separating the business from the real estate where it is located is a best practice. Most buyers want a long-term lease on the property. They may request an option to buy at the end of the lease. If a buyer is obtaining commercial financing for the purchase, the lender will most likely require a long-term lease unless it is shown that the location is not desirable for the buyer’s planned business. Some buyers will have excess capacity in their existing location and not want the property. This can all be negotiated in the terms of the deal.

What will happen with my long-term lease?

Landlords want to have good tenants more than anything. They will want to see the buyer continue leasing from them and buyers, in most every case, need to have your location to continue the success of the business. Most often landlords will do a lease assignment but still hold you as a guarantor for the duration of the existing lease. If the buyer is obtaining commercial financing, the lender will often require the lease to be transferred to the new buyer. This is a critical component of the transaction.

What will your services cost if I already have a buyer?

Finding the buyer is an important part of a broker/intermediary’s role. However, there is a significant amount of critical work to be performed in advising and closing the transaction. Because you have a buyer, the fee is negotiable.

What information is going to be needed to sell my business?

A lot of information will be required. Historical financial statements, copies of leases, notes payable, equipment leases, asset lists, accounts receivable aging and many more documents will be required. Additionally, some narrative description of the business, the reason for selling, profiles on employees, and other documents will be required. We can give you a list when the time comes, along with a questionnaire about your business that will aid us in developing the very best support materials with which to present your business to the market. Good records will make the due diligence process go smoothly.

How far in advance should I begin to prepare to sell my business?

If you plan on selling your business in the future–any time in the future–today is the day to start planning and preparing. The longer the time frame the better the result will be. Start with getting your free Value Builder Report. This can be a productive first step in not only making your business more valuable but also more profitable and easier to run. Those two things simply go hand-in-hand.

What steps can I take to improve the value of my business?

Working with a team of advisors that have experience with getting a business ready for sale is the best first step. Chinook can set you on that path. We strongly believe in beginning with the end in mind. Using the Value Builder Report will help you establish a step-by-step plan to go forward. The more time you have to accomplish these steps, the better off you will be.

In general some of the steps will include:

  • increasing your sales volume every year,
  • developing a management team that can run the business without your involvement,
  • making sure your accounting/financial records are accurate and strong,
  • removing family members from the business (sounds harsh, but is necessary),
  • eliminating or reducing personal perks from business expenses,
  • disposing of unproductive assets or idle assets,
  • creating a sales force that can operate without your interaction,
  • diversifying your customer base. No one customer should be more than 5% of revenue, and
  • taking care of repairs and maintenance issues as soon as possible.

What can I do to help sell my business?

When Chinook is in the process of selling your business, you can help by:

  • keeping normal working hours,
  • conducting business as usual and continuing to be an effective owner,
  • not letting inventory levels dip below normal,
  • keeping the business clean and in good repair,
  • removing equipment or furniture that is not part of the sale,
  • providing us with required information in a timely manner, and
  • being as accommodating as possible in setting appointments to meet with buyers.

How will a buyer pay for my business?

Buyers typically use a combination of their own and other people’s money to make their purchase. Other people may include friends and relatives, institutional lenders and very often you, the business seller. Buyers (and bankers as well) feel that if the seller is willing to finance a portion of the sale, the seller has the confidence that the business will be able to make the payments. This is known as Vendor Financing. When Vendor Financing is available it makes the business more sallable because the financing options not only increase confidence buyer and lenders, but also enlarge the buyer pool as more people will be able to afford to purchase the business if a good portion of the business is financed.

Do I have to offer Vendor Financing to the buyer?

No. It is, however, in your best interest to do so. If you are reluctant to support the transaction in the form of loaning some money, the buyer and other lenders will be skeptical of the transaction being considered. They will feel that if the seller has no confidence in the deal, then perhaps they should not either. If you are looking for all cash for your $400,000 business, the buyer who has the $400,000 will pass you by because another business worth $600,000 has an owner willing to loan $200,000 into the equation. A buyer will typically purchase the biggest opportunity they can afford. If that is true, they will take their $400,000 and buy the larger business.

How will I be protected on financing I might provide to the buyer?

Your lawyer will provide documentation evidencing the indebtedness. This may include a promissory note, security documentation over the assets of the business being sold such as a general security agreement or a mortgage of land and buildings included in the sale, and sometimes personal guarantees from the purchasers.

Will the buyer pledge any additional collateral for my loan?

Buyers do not pledge additional collateral for your loan. When a buyer buys a business, they do so based on the business’s ability to generate sufficient cash flow to pay your loan and provide them with an income to meet their needs. When you ask for additional collateral, you are veritably warning the buyer that they paid too much for your business and the business will not generate enough cash flow to pay your loan and provide adequate cash flow to the buyer.

When should I tell my employees about the sale?

Although it sounds harsh, our considerable experience has proven that it is best to tell your employees about the sale immediately before or immediately after the sale is complete. Of course, if there is an employee whose expertise will be needed after the sale, you should introduce the buyer to this employee shortly before closing. Chinook will assist you in determining the timing for notifying employees.

How does Chinook market my business?

First, we present your business to the pool of buyers on our database looking for suitable businesses to purchase. A thorough understanding of your business’s synergistic opportunities will allow us to develop a marketing plan for the sale of your business. Currently, the primary general method is through the internet where we subscribe to the most effective sites that specialize in presenting businesses for sale. This is all done without specifically identifying your business.