Taking the next step: Preparing a business for growth, succession or sale

Canadian business owners are juggling tariff disruptions, cost pressures, cautious consumers, and an uncertain economic outlook. With so much up in the air, it’s not hard to see how transition planning has lately taken a backseat in the business world. But failing to prioritize transition planning can have dire consequences for not only the business, but for economic growth as well.

With many owners edging closer to retirement, it’s time to think seriously about a plan for growth, succession, or a sale.

In a national survey, the Canadian Federation of Independent Business (CFIB) found 36% of owners said they’re too busy running the business to plan a transition, with others saying they don’t where to start or don’t have cost-effective access to professional advice. On a macro level, this threatens to jeopardize the successful handover of some $2 trillion in business assets over the next 10 years, according to the CFIB.

• The economic case for getting business succession right

For Canadian owners considering their next steps, it’s helpful to reframe your preparations not as a fork in the road, but a pathway. That’s because no matter what form the transition ultimately takes, you set yourself up for success in the same way: by supporting growth through good business practices.

Keep your options open

Dan Simile, the owner/operator of the cookie manufacturing business Hollandia Bakeries, didn’t set out to sell his business in his early 60s. He was on a strong growth path.

“I had no intention of selling,” Simile says. “I loved being in the food business, especially cookies, with the fun aspect of it.”

Simile’s operation was making more than half a million cookies a day, which included private label/control brands for most of the top Canadian retailers and also held the licences to make Disney Cookies, Marvel Cookies and Nickelodeon Cookies. Only a few years ago, Simile bought out his long-time partner to take 100% control of the company and acquire the manufacturing side.

Simile explains: “My intent was to take it to the next level, and then perhaps in eight or nine years, sell it or expand the footprint in the Southern Ontario manufacturing location.”

Then, there was a knock on the door. Simile was approached by Graham Partners/Commercial Bakeries, and it’s easy to see why: Hollandia offered scale, commercial manufacturing capability, readiness for growth, and established relationships within the industry.

“What got my attention was the fit, and the professional and talented team at Commercial Bakeries,” Simile said. “I’m 63, and so you start to think about longevity and how many years you have to really pump energy into this business.”

He decided the time was right after all and sold in 2025.

“I’m glad I got a jump on it,” Simile says.

The formal sale process took over a year, which is typical. Owners should keep this length of time in mind; but to maximize the outcome, preparations should start long before that—two years or more.

Give yourself the gift of time

Tom Stevenson, president of the construction equipment rental business Hub Equipment, recalls he spent a few years considering his exit options. He made it a priority to approach transition planning thoughtfully and responsibly, as someone passing on a third-generation family business that had been started by his grandfather.

“You have to be detached about it and rational and make the best decision in the interest of all the employees, and not do it from a personal, family point of view,” Stevenson says.

In 2023, he sold to Cooper Equipment Rentals.

“It wasn’t so much about maximizing the actual sales proceeds, but rather finding the right cultural fit for our staff and which company could do the best job of carrying on our legacy in the heavy equipment industry,” Stevenson says.

Stevenson appreciated that even post-sale, Cooper opted to keep the Hub branding alive in the lead-up to the company’s 80^th anniversary celebration in 2026.

He says: “Passing the baton on to another owner is probably the most challenging part of business ownership. But you can’t have an ego and try to hang on forever. You’ve got to do what’s in the best interest of the employees, without whom you wouldn’t be in the enviable position of selling your business.”

On the flip side, owners who delay transition planning may find themselves on a rushed timeline due to an unforeseen event like a health crisis. In these circumstances, there are fewer options on the table for consideration.

Now is the time to, for example, trim any lifestyle expenses and clean up any outstanding payables and receivables. Resist the urge to coast toward retirement. Have a strong management team in place that can step up when the owner steps down. Owners can consider giving senior employees incentives to ensure a transaction is completed successfully. Retention bonuses can keep the team strong.

Professionalize the operation

These are practical early steps owners can take toward a successful transition. Whether for growth, sale, or succession, ensure your business is a professional operation poised for growth under any leader.

Stevenson says of Hub Equipment, “We still ran it every day like we were going to remain independent.”

He didn’t make any extraordinary last-minute upgrades or changes; it was business as usual—making sound decisions, being selective about clients, not taking on bad debt.

Keep in mind some of the top things that can tarnish a business’s presentation:

• Poor record-keeping that leaves more questions than answers
• Declining performance
• An “indispensable” owner that hasn’t prepared a strong management team

Stevenson says, “The vast majority of our 15 employees transitioned to Cooper, several of whom hold key positions today at Cooper Equipment Rentals.”

Have the right people in your corner

Simile recalls that because a buyer approached him directly, he asked around about whether he needed a broker to facilitate the deal. In the end, he decided yes, it was in his best interest to hire professionals.

“You really have to understand your capabilities as a company and your resources that you have,” he says. “After some investigation I thought we needed more sophisticated financial analysis, planning and purveying to go through with this.”

For Stevenson, a business sale advisor served as a good sounding board during unexpected delays in the process, including during the COVID lockdowns when the company lost money for the first time in 50 years.

“You really have to trust your advisors,” he says. “They helped keep us focused and looking at the end result, the final outcome.”

In 2021, business roared back to life and in 2022, the time was right to proceed with the sale.

Owners should keep in mind that a valuation gap is one of the top reasons a potential deal can derail. Establish fair market value based on consultations with trusted advisors, not owner perceptions, especially in a fast-changing market.

A new chapter

Business transition can be an incredibly rewarding experience when done successfully.

Simile says, “Seeing the new energy that’s there now, especially with respect to sales and management, you can tell that they’re really going to grow the business.”