Questions owners often ask

No. Many owners call us while they are still thinking about timing, value, what a transition would look like and what life after the business might be. You don’t need to have it all worked out.

A first conversation is confidential. We talk about what you have built and what you want, and we give you a realistic view of your options, including whether the business is ready for the market and who the likely buyers would be. Whether you go further is entirely up to you.

It depends on your personal goals, how the business is performing, conditions in your industry and how much buyer interest there is. Strong results and a healthy market help, but waiting isn’t always necessary or better. A business can attract good buyers even when some things could still be improved.

We can look at where the company stands today and help you decide whether to go to market now, make a few targeted improvements first, or plan over a longer period.

We ask about the business, how it has performed, what role you play in it and what you would like to achieve. If you have recent financial statements we may look at them together, but you don’t need to send anything in advance.

By the end you should have a better sense of how buyers might see your company, what affects its value and what a sale process would involve. There is no obligation and nothing to sign.

Our focus is privately held businesses with transaction values from roughly $500,000 to $30 million. Most are established, profitable companies whose owners are thinking about a sale, a partial sale or a succession plan.

Yes. Most of our work is on the sell side, where we represent the owner. We also work with buyers who are searching for an acquisition, helping them find and evaluate businesses, structure offers and coordinate financing and due diligence.

In any one transaction we act for one side. When we represent a seller, we still deal with buyers professionally and keep the process moving, because a well-run process is in everyone’s interest.

Buyers start with earnings, but not the profit on your tax return. We first adjust (normalize) the financial statements to remove personal, one-time and non-operating items and show what the business really earns. For smaller owner-operated companies that is usually seller’s discretionary earnings (SDE); for larger ones, adjusted EBITDA.

We then look at what buyers have paid for similar businesses and at the things that make your company more or less risky: customer concentration, recurring revenue, how much it depends on you, the condition of equipment, working capital needs and the outlook for your industry. The result is a realistic value range rather than a single number.

Start by presenting the business clearly and credibly. Buyers need to understand its financial performance, market position, strengths and growth potential.

We normalize the financial results, prepare the transaction materials, find and screen qualified buyers and run the process so that, where possible, more than one buyer is interested at the same time. The aim isn’t only a good price. It is also favourable terms, protected confidentiality and a better chance that the deal actually closes.

The changes that usually matter most are clean, consistent financial statements, less dependence on you personally, a broader customer base, documented processes and agreements, and steady or improving results in the years before a sale.

Not every improvement is worth the time. Part of a preliminary conversation is working out which changes are likely to affect what a buyer would pay, and which are not.

Due diligence is the buyer’s detailed check of the business after an offer has been accepted. Expect requests for several years of financial statements and tax filings, customer and supplier contracts, leases, employee information, corporate records and details of equipment and assets.

Having these organized before you go to market shortens the process and avoids the delays and price renegotiations that often come from surprises late in a deal.

It varies with the size and complexity of the business, how prepared it is, the market and the buyer’s financing. Preparation, marketing, negotiation, due diligence and closing together often take many months, and some sales take a year or more.

We will give you a realistic timeline for your situation once we understand the business, and we work to keep the process moving at each stage.

Buyers are first introduced to the opportunity through a short summary that does not name the business. Interested parties are screened for financial capacity and fit, and they sign a non-disclosure agreement before they receive detailed information. Sensitive details, such as customer names, are usually shared later, once a buyer is serious.

No process can rule out every risk, but careful screening and controlled release of information greatly reduce it. We will discuss with you how and when to tell key employees.

Most offers are set out first in a letter of intent (LOI), a document that records the price and main terms and usually gives the buyer a period of exclusivity. The buyer then completes due diligence while lawyers prepare the purchase agreement. Once the agreement is signed and its conditions, such as financing, are met, the transaction closes and ownership changes hands.

The most important thing is to keep running the business well. Buyers and lenders watch current results, customer relationships, employees and day-to-day stability closely.

You will also need to provide accurate information, respond to reasonable due-diligence requests, keep the process confidential and be available for key meetings. We handle the preparation, buyer outreach, screening, negotiations and coordination so that you can stay focused on the company.

The common ones are an unrealistic asking price, sharing confidential information too widely, spending time with unqualified buyers, inconsistent financial information and letting the business slip while the sale is under way.

It is also a mistake to focus only on the headline price. Financing conditions, working capital requirements, earnouts, seller financing, transition obligations and indemnities can all change the real value and risk of an offer. We help you compare offers on both value and certainty.

Seller financing, usually called a vendor take-back (VTB), means you lend part of the purchase price to the buyer and are repaid over time. It can bridge the gap between the price, the buyer’s own money and what a bank will lend.

It isn’t required in every deal. Whether it makes sense depends on the strength of the buyer, how the financing is structured, how much you would have at risk and the rest of the offer. Used well, it can widen the pool of buyers, support the price and help a deal close. We help you weigh the benefits and the risks before you agree to anything.

An earnout is part of the price that is paid only if the business hits agreed targets after closing, such as a level of revenue or earnings. It can help when buyer and seller disagree about the future, but it depends heavily on clear definitions and on how the business is run after the sale, so it needs careful negotiation.

It depends mainly on how the transaction is structured. In Canada, an owner selling shares of a qualifying small business corporation may be able to use the Lifetime Capital Gains Exemption, which can shelter a significant amount of capital gains, currently about $1.25 million per individual. Because of this, a share sale is often more tax-efficient for the seller than an asset sale, although buyers frequently prefer to buy assets.

We work with your accountant, tax advisor and lawyer to consider eligibility, how the price is allocated and what you would keep after tax. The rules are detailed and change from time to time, so always get independent tax and legal advice for your own situation.

No. Kingston is an advisory firm, not a lender. When a business needs financing, whether for growth, working capital, equipment, refinancing or an acquisition, we prepare the financing package, approach suitable lenders and manage the application through credit review. Each lender makes its own decision. Through our private capital work, we introduce investors to acquisitions that we source and manage.