Events or developments, either sudden or creeping drive a Founder’s decision to sell their business. We like to call these the four triggers: Strategic, Operational, Financial, or Regulatory.

A February 2017’s  Nationwide’s latest Small Business Survey found that three in five small businesses do not have a succession plan in place and there is no reason to believe that the percentages are different in Canada.  In the survey, “small business” was defined as having fewer than 300 employees and in Canada, 90.3% of private employees work for companies with less than 499 employees.

Reasons cited for having no succession plan include:  business owners simply not believing a plan is necessary (47 percent); not wanting to give up one’s life work (14 percent); not knowing when to create a plan (11 percent) or who to work with (11 percent); not having time to develop a plan (11 percent) and being overwhelmed with government regulations (8 percent).

Whether you believe that good companies are bought and not sold really doesn’t matter, if you want to maximize the value of the sale of your business you have to plan and prepare, otherwise prepared to be disappointed.

Here are our four triggers.  Which ones are appropriate for your business now or a risk in the future?


-The industry is being consolidated and the Founder does not have the interest, capital or resources to be an acquirer.

-The Founder is approached by a competitor or financial buyer with an unsolicited offer that is attractive and meets with the Founder view on valuation.

-Unforeseen competitors have entered the market with a business model that disrupts the incumbents. Examples of this would be UBER disrupting the taxi industry, Airbnb’s disruption of the accommodation sector or Netflix disrupting the home movie and video game rental business.

-The industry’s largest competitor is spending tens of millions of dollars on state-of-the-art manufacturing equipment positioning themselves to significantly change the cost structure of the industry and your Company is not in a position to respond.


-The Founder is looking to retire and as their net worth is almost entirely wrapped up in the business needs to find an acquirer.

-The Founders health is eroding and there is no succession plan in place.

-The Company’s margins are being squeezed by changes in the sources and use of inputs. For example, an IT Services company with large financial sector customers must offshore a percentage of its development work in order to meet RFP requirements or client demands;

-The Company has built its business on enterprise software licenses and has not developed a plan or transition to a SaaS model. Consequently, the entrepreneur is having difficulty attracting the capital required to hire the resources for the transition.


-the Company requires investment capital to grow and sources are limited or too expensive.

-e-Commerce initiatives by competitors or suppliers are driving profit margins down. An example could be Amazon’s early entry into the book-selling business, or a Company’s supplier opening an -e-commerce site that now exposes your company’s margin information and sales to your customers.

-The Founder and his wife are divorcing and the family assets must be liquidated.


-New or changing regulations will change the Company’s growth and profitability opportunities. For example –The US government implements a “Buy American” policy on all new infrastructure projects, severely hampering a Canadian company’s export sales;

-Changes to Cross Border Services Agency (CBSA) regulations or Carbon Tax implementation negatively impact Company profit margins.