Tweet

Buying a business in Toronto GTA, Ontario

Guest post by: Omar Kettani

Article Overview: The purchase of a business in the Greater Toronto Area is not an easy task. This article sheds some light on the business purchase process and explains some of the intricacies of buying a business in the Toronto Metropolitan Area.

Buying a business in Toronto GTA, Ontario

The greater Toronto Area (GTA) is the largest metropolitan area in Canada with more than 5 million inhabitants. It is also one of the most buoyant business marketplaces in Canada with thousands of businesses changing hands every year. The purchase of a business in the GTA remains however a very challenging endeavour for the following reasons:

1. Financing the purchase of a business is almost non-existent.

2. The business for sale market is quite illiquid.

3. The process of buying a business is very inefficient since information about the businesses available for sale is not readily available.

4. Business sellers are generally very emotional when selling their businesses and experience mood swings that can be frustrating for business buyers.

5. There is a relatively few number of professional business brokers in the marketplace since the profession requires hard to find skills and knowledge and can entail a high degree of uncertainty that most professionals cannot handle emotionally.

The highly motivated buyers with a clear purpose to buy a reasonably profitable business do however succeed in reaching their dreams. Buyers with a good assessment of their skills and aspirations need to spend the necessary time to understand and research the marketplace in order to find the business that fits best their criteria. Buyers should beware that there is no perfect business. Therefore they should have the ability to act quickly when they find a company that matches their aspirations.

Serious business buyer need first to spend the necessary time to understand their real motives behind buying a business, their own skills and capabilities, and the different opportunities offered in the industries they are contemplating. Often wrongfully neglected, this basic introspective research helps focus potential buyers on the right business opportunities and save them time and money that could otherwise be wasted chasing businesses that clearly don't fit buyers' personalities and skills or that do not offer potential for reasonable profits enabling buyers to make a good living out of the purchased businesses.

Searching the Internet for business for sale websites in the city of Toronto is a first step for a ready buyer who has already done his/her homework of understanding the marketplace through reading books, blogs and other types of throughout research.

The second step is to aggressively contact business owners and/or brokers representing the business listings while showing motivation, readiness and financial capacity to close a deal.

The third step is to select a business and put an offer on it. While negotiating the right price and terms is extremely important, buyers should put their focus on reaching a buyer sided agreement. Sellers need also to have achieved a great deal for themselves. Reaching a win-win transaction is extremely important for the buyer for the following reasons:

1. Unhappy sellers do change their minds about selling very frequently (close to 50% of times in my experience). Most sellers are not in urgent need to sell and can wait a few more years, especially if the business is profitable and if they are not happy with how the negotiations went.

2. Unhappy sellers do not put their best efforts to train the buyer during the transition period. When goodwill represents a large portion of the purchase price, which is the case in the vast majority of business transactions, tremendous value is been transferred to the buyer in the form of training, tips and tricks, relationships etc... . Unhappy sellers do not put their hearts into helping the buyer and the buyer suffers as a result loses that are much more important than the price reduction as a result of bargaining.

The final step is conducting a thorough due diligence and closing the transaction. Due diligence is extremely important since buyers need to verify that information and assumptions about the business are valid. The decision to purchase a specific business is generally build on the validity of these assumptions so verifying these assumptions is paramount. Closing the transaction involves business lawyers and generally parallels legal negotiations on matters such as warranties and representations and other legalities. While these legal matters are important for buyers and sellers, most lawyers tend to exaggerate their importance leading to many deals unfairly falling through at the last minute.

Welcome to the world of business ownership!

Related Articles
  Mortgage Canada Ontario - Why working with a Broker is better
  The Energy Debate
  Creating a Toronto Tagline
  Toronto Real Estate Trend and Market – What is the Current Outlook?
  Toronto Real Estate & Mortgage Trend and Market – What is the Current Outlook?
  How To Raise Money For Film Financing via Ontario and BC film grants and Tax Credits
  Sagar Ratna to expand overseas via franchising
  Exploring The Town Of Ontario Ajax
  Better to save than go new - Here’s an example!
  Select Your Ontario Canada Mortgage Carefully
  Auto Insurance Ontario
  Incentives For Energy Conservation
  Ontario mortgage interest rates - Mistakes to Avoid When Buying a Dwelling
  Lowest ontario mortgage rates – Factors on the way to Inquire about the Unsurpassed Rates
  Lowest ontario mortgage rates – Explanations en route for Get the Preeminent Rates
  How Article Marketing Can Help You Even If You Own a Local Business
  Stewarding Energy
  Information on the Film tax credit for Canadian Independent Productions in Film and Television and Digital Animation
  Hiring A Mortgage Broker
  Create Hero’s Everywhere

Article Tags: business for sale, business purchase, buying a business, greater toronto area, metropolitan area, toronto gta



Related Forum Posts
Re: Will North America make carbon taxes anytime soon? - Well I recently started to work at a solar company in Ontario, and business is booming. The Ontario government is doing a great deal since passing the Green Energy Act. This is where the government is buy the energy you produce. 80 cents for kwh. A lot of people in Ontario are putting up solar panels on their roofs, and feeding back the grid green energy.
Re: This is ilia sviatenko - Me and my dad currently withdrew from the spa business, we dont know anything about it. we were just silent partners. That is ok, because there are a lot of different opportunities out there right now. I recently started to work at Solera. This is an Ontario solar company. Solar panels are a booming business right now in Ontario thanks to the new government act, where the government buys energy that you produce. 80 cents for 1 kwh. If you install 10 kwh solar modules, you will be producing about 12,000 kwh a year. 12,000 x .80= $9600 year or $800 a month. The best part about the solar modules is that they need little or no maintenance, they have a 25 year warranty. 25 year is alright but most last up to 40 years. If you guys have any questions let me know. you must be an Ontario citizen to qualify for this.
Re: How many nationalities are on the forum? - While my parents were both from Asia, I was born and raised in Toronto, Ontario, Canada. As such, I'd always consider myself 100% Canadian I don't know if I could even call myself "Chinese" when I've never even been to China.
Re: How many nationalities are on the forum? - [quote="BuzzAroundBooks":374grcfz]While my parents were both from Asia, I was born and raised in Toronto, Ontario, Canada. As such, I'd always consider myself 100% Canadian I don't know if I could even call myself "Chinese" when I've never even been to China.[/quote:374grcfz] Kevin,You are still a chinese any one that see your facial structure will not think twice before calling you one. Can you speak Mandarin?
I need a mailing address for office space in Toronto - HI there I am in London UK starting a financial services business. I am from Toronto and I would like to list a Toronto office on the website. Does anyone know where I might be able to use someone's office mailing address? Just to pick up mail once in a while, although mail will very rarely be sent there. Any ideas on how to get around this? Many thanks Jamie


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Making the Most of Your Trade Show Experience

Looking for an Easy Online Business Opportunity?

Self Employed Business Ideas

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.