Jason Brice is Your Vancouver Business Broker

The single biggest factor that contributes to a high multiple is: Growing revenue year-over-year for multiple years. Buyers ideally want a business with growing revenues. The profit as a percentage of revenue is also a key factor (eg. A business with a 20% profit margin will typically sell for a higher multiple than a business with a 10% profit margin). Industry factors, and the forecasted growth or decline in a specific industry, are a substantial factor in determining a business’ multiple. Customer concentration is a key factor (eg. If more than 15% of your annual revenue comes from any one single customer, then that can negatively affect the overall multiple your business will sell for). Personnel matters is a huge factor in many business’ multiple calculations (eg. If your management team has all been there for 10 years and they are wanting to stay, then that is highly appealing to buyers, and will increase the business’ multiple). And most importantly is the banks’ appetites for lending to various business models in various industries. I get every new listing pre-financed so that we know how much money the lenders will likely lend an approved buyer, and that will be a determining factor in your business’ multiple. There are about a dozen other key factors which we will examine throughout the valuation process.​

Most of the time the buyer of your business is going to be an entrepreneur who has at least some experience in your industry, who finds my advertisements online. They may be an immigrant to the country, however, typically they have been living here for a number of years. I have a large database of private equity buyers, however they typically only entertain business opportunities with $500K+ EBITDA. So if your business matches their criteria, then I will explain our best approach. I have a large database of overseas buyers and immigration consultants, however there is strict criteria for business visas, which we can discuss at our initial consultation call. And we can absolutely market your business to competitors, however that strategy often yields below-market offers. The person who buys your business is most likely to be a typical businessperson or small group of investors.​

On average, it takes me about 9 months to sell a business. Once a business is priced correctly, then I can usually get it under offer in 6 months with an additional 60-90 days required for due diligence, financing, legal documentation, and closing. My fastest record is getting a business under signed offer in 11 days ..... however, that was incredibly rare. Conversely, one listing I had (which was priced right and marketed thoroughly) unfortunately took me just over 21 months to close. During our initial free consultation call, I should be able to give you an estimated timeline based on your business model and financials.​

There is no seasonality to selling a business.  Buyers are looking for good businesses every month in the year.  Because the sales process typically takes 9 months, there is no advantage to waiting until your fiscal yearend or any other time in your particular business cycle.  The biggest factor regarding sale price, is to sell your business when revenue is increasing, and not waiting for revenues to dip and then trying to sell..... so in that regard, the best time to sell your business is when revenue is increasing.  However, stable revenues and small revenue declines won't affect the timeline.​