I Tried to Buy a Business. Here's What I Found.
Not long ago, I booked an appointment at RBC to discuss acquisition financing. I had a specific deal in mind — a small business, all-share purchase — and I wanted to understand what the bank would need before I dragged an owner through due diligence. That seemed like the prudent approach. Know what the lender requires, evaluate the deal accordingly, avoid wasting anyone's time.
The officer I met with was surprised I hadn't arrived with a completed application. As though it was obvious what a first-time acquirer would need before speaking to a banker. It wasn't obvious to me, and I've spent more than fifteen years working in and for financial institutions. I can only imagine what it looks like to a business owner approaching this for the first time.
The situation got more revealing from there. The small business team couldn't handle the deal — an all-share purchase was outside their scope. The commercial team wasn't interested — the deal was too small. I fell into the gap between two desks that weren't designed to work together, in a system that wasn't designed for what I was trying to do.
That experience didn't surprise me analytically — I already knew the data. But living it gave me a clearer picture of what Canadian business owners are actually up against when they try to exit on their own terms.
The System Isn't Built for This
The Canadian banking sector is an oligopoly. Six institutions control the overwhelming majority of business lending in this country. And their product structures — small business lending on one side, commercial lending on the other — create a gap that is most acute for owner-to-owner transactions in the $500K to roughly $2.5M valuation range.
At this scale, a deal is often too complex for the small business desk and too small for the commercial desk. Legal fees, accounting, and due diligence costs represent a meaningful share of the total transaction value. There is no clean product on any Canadian bank's shelf for an all-share purchase between two private individuals without significant existing collateral. Buyers who arrive without liquid capital or a pre-existing commercial relationship often find exactly the gap I found: no one at any desk is structurally set up to help them.
"The buyers who show up ready with capital aren't always the buyers you'd choose. Private equity isn't evil, but it optimises for returns, not for what you spent 25 years building."
At $5M and above, the picture changes. Commercial lending is accessible. BDC — the Business Development Bank of Canada — is an active mid-market lender specifically designed for transactions the chartered banks won't touch. Private credit, mezzanine finance, and family office capital all operate in this range. The buyer pool is also broader: strategic acquirers, management buyout teams with lender support, and institutional buyers become realistic counterparties.
The challenge at the upper end is not access to capital — it is process complexity and the sophistication of the buyer doing the evaluating. Deals above $10M involve more structured due diligence, longer timelines, and counterparties experienced enough to discount aggressively for every operational risk they find. Being unprepared at this scale doesn't close the door. It means you negotiate from weakness.
For businesses in the lower valuation range with a limited buyer pool, private equity — or a PE-adjacent roll-up — often becomes the exit by default rather than by design. That isn't inherently a bad outcome. But it rarely reflects the full value of what the owner built, and it's almost never the outcome the owner had in mind when they started the business.
The Wave Is Here. The Infrastructure Isn't.
The succession numbers are not a prediction. They are already underway. Canada's BDC estimates that more than $2 trillion in SME assets will change hands over this decade, as the generation that built these businesses reaches retirement age. Roughly 60% of SME owners are over 50 today.
At the same time, Canada's inter-provincial trade barriers — what economists have called an effective internal tariff of nearly 9% — add friction and cost to any business that tries to scale across provincial lines before a sale. That complexity suppresses valuation. A business that can only operate cleanly in one province is worth less than one that can demonstrate national reach or replicability.
The owners who will exit well in this environment are not the ones who wait for conditions to improve. The banks are not going to restructure their product lines on your timeline. The trade barriers are not going to disappear before your retirement date. What you can control is how prepared your business is when a buyer — any buyer — walks through the door.
What the Timeline Actually Looks Like
One of the most consistent misalignments in exit planning is the owner's assumption about how long a sale takes. Most owners, when they decide to sell, assume the process will take six to twelve months. For businesses above $5M in valuation, that assumption is almost always wrong — and the gap between expectation and reality is itself a preparation problem, because owners who are surprised by the timeline tend to make worse decisions under the pressure of it.
The following represents practitioner-level estimates for businesses that are reasonably priced and reasonably prepared. These are median ranges, not guarantees — a well-prepared business with clean financials can land in the lower half of each band; a business with customer concentration, messy books, or high owner dependency will often exceed the upper end.
Three factors consistently compress or extend these timelines across every range: pricing discipline (an owner asking 20% above market adds months, not leverage), quality of preparation (clean financials, documented processes, reduced owner dependency), and industry characteristics (a simple professional services firm has a broader buyer pool than a regulated manufacturer or a business with environmental complexity). The businesses that close in the lower half of each range above have typically been building toward that outcome for at least two years before going to market.
What "Prepared" Actually Means
When I evaluate a business as a prospective buyer, I'm looking at three numbers first: operating cash flow, gross margin, and the quick ratio. Those three tell me whether the business is real or whether it's a story. Revenue is not one of them.
Beyond the numbers, I'm looking for key person dependency. If the business runs on the owner's relationships, judgment, or presence — if the answer to "what happens if you get hit by a bus?" is "we don't know" — that's a valuation problem, not a personnel problem. No sophisticated buyer pays a premium for a business that stops working when the founder leaves.
I'm also looking at documentation. Not ISO certification or management consulting deliverables. Simple, usable documentation of how the core processes in the business actually work. If that knowledge lives only in the heads of two or three people, a buyer is pricing in the cost of rebuilding it.
None of this is complicated. None of it requires a 12-month engagement. But it does require starting before you're ready to sell — because by the time you're ready to sell, the window to fix these things without destroying the valuation has usually already closed.
The Honest Conclusion
The Silver Tsunami is going to produce two kinds of exits: the ones where the owner prepared early enough to have options, and the ones where the owner ran out of runway and took whatever was on the table.
The banks won't fix this for you. The government moves slowly. The PE firms will always be there with a cheque — that's not a bad thing, but it shouldn't be your only option by default.
Preparing your business for exit is not about planning to sell. It's about building something that could be sold, at any time, to the right buyer, at the right price. That's also just good business.
If you're a Canadian business owner generating $2M to $50M and you've started having this conversation in your head — even if an exit is three to five years away — that's the right moment to start. Not because urgency is a sales tactic, but because the work takes time and the wave is already moving.
