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Growth or exit? Maximize the value of your business

If you’re considering transitioning out of your business, whether by a growth or exit strategy, here’s how to set that transition up for success.

By ATB Financial 29 June 2023 4 min read

The Canadian Federation of Independent Business recently released a report saying 76% of business owners plan to transition in the next 10 years. With the growth-or-exit question top of mind for so many, members of ATB’s Private Equity and Wealth teams shared tips for how to prepare for that transition.

Sources: Canadian Federation of Independent Business, Exit Planning Institute, The Master Plan Exit Strategy For Successful Business Owners.



Start planning now

There’s a “silver tsunami,” Terry Freeman, Managing Director and Head of Investment with ATB Private Equity, observed. Silver tsunami refers to a demographic trend where entrepreneurs are reaching an age where they wish to exit their businesses, and often have no plan for succession, both operationally and to replace their capital. People often think succession planning is an easy one-and-done document. But there are a lot of conversations to be had, family decisions to be made and work to ready the business. “I think of it more as a process,” said Amanda Vella, Managing Director Business Consulting with ATB Wealth.

You may also need more time to find your successors because your pool of candidates could be smaller. These days, fewer children are inclined to take over family businesses, and management teams, having watched now-burnt-out owners struggle through COVID, may be wondering about the wisdom of assuming a business.

From a tax perspective, Michelle Seymour, Managing Director Wealth Planning with ATB Wealth, recommends consulting with a tax advisor more than two years in advance. This allows you to do comprehensive tax planning and maximize your after-tax proceeds from the eventual sale. “The sale of a business is a significant life event for a business owner, but it also represents a very significant tax event.”


Always be ready

If you’re considering selling, ensure your business is “ready to sell, all the time, even if you’re not in the market,” advised Freeman. You don’t want to feel pressured, or desperate, when the time comes, prone to forgetting something or making mistakes. It will look like your business is running you, rather than you running your business.

Eliminate dependencies, document your processes, structure a proper data room, track your EBITDA adjustments, learn what a quality earnings report is. This ensures that when prospective buyers come knocking, they can see the growth potential and how they’ll make their rate of return. The biggest risk Vella sees is dependencies—on the owner themselves, a customer or supplier, even a single employee. She recommends starting your process by identifying and reducing those dependences to mitigate the risk to the buyer.


Know thyself—and your partners

Knowing your business’s worth is crucial. However, as Vella pointed out, most owners don't have a good grasp of that value. “It’s their baby and nobody has an ugly baby.” She estimated that 95% of the time, business owners think their business is worth more than it really is. Knowing its true value will help you make better decisions.

If you’re planning for a full exit, that may call for a different private equity firm than if you’re looking for a minority shareholder. If you are not looking to exit, this major transition of business owners also creates a significant opportunity to grow your business by buying other businesses that are for sale. If you are looking to grow through acquisition, then do your due diligence on your prospects. Get as much access to management as you can to understand how they operate to ensure that small red flags spotted in negotiations don’t turn into giant red flags later.


More transition tips

  • Don’t get hung up on multiples or get multiple envy. Things change quickly in that arena, and most people exaggerate them anyway.
  • Keep a level head. This is your baby, so that’s easier said than done, but when emotions get in the way, they can quash deals.
  • Think about what your life after business looks like. Get excited about this new stage. This will make your well-deserved transition that much easier.

Business Transition Guide

Learn the steps you can take to successfully sell and transition out of your business.

About the speakers

Amanda Vella brings more than 19 years of specialized experience in management consulting,  finance leadership, strategic planning, transaction advisory and executive coaching to support business owners. She is focused on providing tailored advice to clients to accelerate the growth of their businesses including organic and inorganic growth strategies, effective exit strategies and preparing for a major capital raise. Prior to joining ATB, she was VP Finance for a high growth international insurance services company. Amanda is a Chartered Professional Accountant and Chartered Business Valuator.

Based in Calgary, Michelle Seymour is the managing director, wealth planning, supporting both advisors and clients in a wider region and leading the wealth planning team. She holds a Masters of Professional Accounting and a Bachelor of Commerce from the University of Saskatchewan. Michelle has also earned her Chartered Professional Accountant (CPA), Chartered Accountant (CA) and CERTIFIED FINANCIAL PLANNER® (CFP®) designations. Michelle is focused on providing ATB Wealth clients with guidance on tax and business succession planning.

Terry Freeman is head of investments for and a founder of ATB Private Equity, the private equity arm of ATB Financial. Terry currently sits on the boards of a number of public and private construction, energy services, technology and real estate ventures. He’s previously held multiple volunteer positions with the Chartered Professional Accountants of Alberta CFO Leadership Program, the UofA,  Creative Destruction Labs, Venture Mentor Service and various other community and charitable organizations.

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