Exit readiness in British Columbia

Who buys BC businesses

The answer depends on where you are. In the Lower Mainland (Vancouver, Surrey, Burnaby, Richmond, Coquitlam), the population base gives an owner-led business more potential buyers, including larger companies expanding into the region. In Kelowna, Abbotsford and the Island, buyers are more often regional competitors or people relocating to run a business themselves. Further north and in smaller Interior towns, internal routes, meaning managers, family or a long-time employee, are frequently the realistic choice.

That changes preparation. An outside buyer in Metro Vancouver will run a formal diligence process and look hard at owner dependence. A management buyout in a smaller town needs managers who already run the place and a financing plan that works locally. The succession route planning service compares those routes.

Seasonality and your trailing numbers

BC's climate is two climates. The southwest coast has mild, wet winters, while the Interior and the North face colder and much longer heating seasons. Tourism, construction, landscaping and outdoor services swing hard with those seasons.

For a seller, seasonality shows up in two places:

• Trailing twelve months. If you go to market in a peak month, a buyer will still want to see full-year results and month-by-month detail.
• Working capital. Receivables and inventory in July can look nothing like January. If the sale agreement sets a working-capital target, the month used to set it matters. The normalized earnings guide explains why.

Track month-end working capital for at least a year before you sell, so the conversation is based on evidence.

The PST clearance certificate

This is the BC rule that most often surprises sellers. According to the province's page on buying and selling a business, a purchaser should get a clearance certificate before buying a business, or before buying goods, software or an interest in a business through a bulk transaction. The certificate confirms that the seller has paid all PST owed, including penalties and interest. A buyer who skips it can become liable for what the seller still owes.

The same page lists shares among non-taxable assets, so a share purchase is treated differently from an asset purchase for PST.

What this means for readiness: keep PST filings current and reconciled, keep your PST account details in the data room, and expect the buyer's lawyer to raise the certificate. A seller with clean PST records makes it routine; one with gaps hands the buyer a reason for a holdback.

Registries and accounts a buyer will check

• BC Registries and Online Services for your company's filings and standing. Make sure annual reports are filed and the directors and offices on record are correct.
• WorkSafeBC for your workers' compensation account. WorkSafeBC's clearance letter shows whether a business is registered and paying premiums as required; ask your lawyer whether the buyer will want one, and what else applies to your deal.
• Federal accounts with the CRA for GST, payroll and corporate tax.

How we would prepare a BC business

1. Pick the likely buyer first, because a Lower Mainland strategic sale and an Interior management buyout need different preparation.
2. Reconcile PST, GST and payroll filings as part of valuation readiness, so the clearance step is quick.
3. Document seasonality with monthly figures and working capital for at least 12 to 24 months.
4. Check leases early. Many commercial leases need landlord consent before they can be assigned to a buyer; have your lawyer review yours well before a sale.
5. Reduce owner dependence with the owner-independence plan, especially where the owner is the business's local reputation.

We are based in Vancouver and work with owners across BC in person or by video call, as well as by phone, text and email. See all regions on the areas page, or call, text or email to talk about your BC business.