Businesses for Sale in Ontario (2023): Best Places to Buy + Mistakes to Avoid

Starting a new business in Ontario involves a lot of steps. Doing the background work is a detailed process that can take weeks or months before you can actually open your doors.

For some people, that kind of a delay is beyond frustrating. If you want to move past the setup work and get straight to the operating-the-business part of starting a new business in Ontario, consider purchasing an existing business.

Looking at businesses for sale in Ontario allows you to take control of a business that someone else started from scratch. This gives you the ability to begin running the business within a few days or weeks after purchase.

Finding a business for sale that fits your interests and skills is easier than you may think. In this guide we break down the resources available for purchasing an existing business in Ontario and provide some tips for completing this process.

Why Buy a Business in Ontario? Pros & Cons of Buying a Business vs. Starting One from Scratch

Deciding whether you want to start a business from scratch in Ontario or to buy a business that is already up and running requires some consideration on your part. We’ve broken down the pros and cons to all the scenarios you have for starting to run a business in Ontario.

Pros of Buying an Ontario Existing Business

  • Shorter time to opening: If you purchase an existing business, someone already did the legwork to start the business. You can skip all that work and simply start running the business after buying it.
  • Historical financials are available: A business already in operation will have some financial records available, showing its sales numbers and profits. If you start a business from scratch, the financial potential is unknown.
  • You have customers: An existing business should have some existing customers, giving you an advantage versus trying to start from zero with your customer base.
  • A franchisor can help you: If you choose to start a franchise in Ontario, you should receive quite a bit of help with setup and organization. If you start the business on your own, you won’t receive built-in help.

Cons of Buying an Ontario Existing Business

  • You don’t have total control: If you are someone who wants to make every decision regarding the creation of your business, you lose this opportunity when you buy a business someone else started.
  • Beware of unfavorable contracts: You could end up inheriting bad employment or supplier contracts. You should go over every aspect of the business’ financials, including any contracts you will need to honor, with the help of a lawyer and accountant before purchasing the business.
  • Watch out for franchise scams: Unfortunately, not every franchise opportunity you find in Ontario is legitimate. Thoroughly investigate any franchise before signing contracts or handing over money, looking to identify any franchise fraud in Ontario.

Pros of Starting an Ontario Business from Scratch

  • Any problems are your own: If you purchase a business and inherit problems, it can be extremely frustrating, especially if they were not disclosed during the purchase process. When you start a business from scratch, you almost certainly will make errors, but at least they will be your mistakes, which may make them easier to live with.
  • Taking your time: If you are a new entrepreneur, the longer ramp up to opening an Ontario business that you are starting from scratch could play to your advantage. You don’t have to feel rushed to start operating the business, and you can make sure all your decisions are smart ones.
  • No limitations on earnings: If you start your business from scratch, the possibilities for success and profits are almost limitless. Certainly, you aren’t guaranteed to have significant success, but you could. An existing business, especially one that’s been around for many years, probably has a ceiling to its potential, because it already has a built-in financial track record.
  • Finding start-up grants: Many business grants in Toronto and Ontario are only available to new businesses. You may not qualify for these grants if you purchase someone else’s business.

Cons of Starting an Ontario Business from Scratch

  • Risk is greater: Because you have no financial track record as a new business, the risk to your seed money is higher versus purchasing an existing business. The business that you purchase has an existing profit statement, giving you income you can count on receiving for a while.
  • Challenging process: Because you must juggle so many things when starting a business from scratch, the steps involved will test all your skills. Purchasing a business someone else started in Ontario skips quite a few of those steps, making the overall process easier.
  • Finding funding is tough: Finding investors in your new business venture can be a challenge. You have to find someone who believes in your vision and trusts your financial projections. With an existing business that has a financial record over the past few years, investment dollars are less at risk and easier to find.

How to Find Businesses for Sale in Ontario

Multiple resources exist that make it easier to find businesses for sale that are already up and running. Some of those resources include the following.

Online Business Marketplaces in Ontario

Online business marketplaces list various Ontario businesses for sale. Many of these businesses will have a broker or agent representing the owner, although some don’t.

Real Estate and Business Brokerages in Ontario

Although Ontario real estate brokerages are more likely to list residential or commercial properties for sale on their websites, some of them also list existing businesses for sale.

Online Classifieds with Businesses for Sale by Owner in Ontario

When Ontario small business owners want to avoid paying commissions to a broker or agent when selling businesses, the owners may try to sell the businesses themselves through online classifieds websites. Because no broker or agent is involved, it’s up to you and your attorney to verify the owners’ financial statements before agreeing to purchase.

Business Brokers in Ontario

Business brokers are helpful resources for those looking to purchase an existing business in Ontario. These brokers focus only on businesses, helping entrepreneurs buy and sell existing businesses and properties.

Because these brokers are so tuned-in to the business market in Ontario, they are the best resources for finding a niche business or for purchasing a business in a precise location in Ontario.

They also may learn about businesses that are coming up for sale before they even hit the market, giving you advanced notice that could help you purchase the business before competitors become involved as buyers.

If you are new to negotiating to buy a business, the business broker can help to facilitate the process. The broker can represent you or can serve as a go-between in the purchase. The broker also may be able to recommend lawyers and accountants who can help you verify the financials that the owner of the business for sale is providing.

Some business brokers in Ontario include:

Tips for Buying an Ontario Business and Mistakes to Avoid

10 Tips for Buying an Ontario Business

  • Investigate your options: Make sure that you fully understand what goes into running a business before you buy one. The Ontario provincial government provides extensive advice for people looking to start or purchase a business in Ontario.
  • Make a plan: Even if you are purchasing a business, rather than starting one from scratch, you need a business plan. Study the existing market, look for advantages you can create, and set goals for yourself.
  • Seek qualified professionals: When purchasing a business, it’s never a bad idea to seek help from pros, like an attorney, an accountant, and a business broker.
  • Determine an accurate value: You don’t want to overpay for the business, which makes determining its value extremely important. The professionals we mentioned earlier can help with this. Additionally, understand whether inventory and other assets of the business are part of the sale, helping to value it accurately.
  • Ask the owner for help: Some owners may be willing to stay on and help you during the business transition for a few weeks or months. This can be invaluable advice for helping you have more success and to answer your questions, rather than trying to figure out everything on your own.
  • Find out how others see the business: Purchasing a business from an owner who alienated customers with poor service will cause significant problems for you. Research the business’ reputation with the Ontario BBB and on social media sites to make sure customers generally see the business in a positive light before purchasing it.
  • Visit the business: You may receive a formal tour of the business property as part of the negotiations. However, you also should visit the business during its normal operational hours without identifying yourself. See how the business operates and how employees treat customers.
  • Roll with the punches: Buying an existing business in Ontario rarely goes smoothly. Be ready for unexpected problems in the purchase of the business, and be flexible in your response.
  • Cater to your strengths: You may be tempted to buy the first business that comes along. However, make sure any business you purchase fits your strengths and skills well, giving yourself the best chance at success.
  • Keep your head up: Purchasing a business sometimes can be a lengthy, frustrating process. You will have ups and downs. Keep a level head and continue working toward your goal. If one business purchase doesn’t work out, another one will be coming your way again soon. Stay positive!

5 Mistakes to Avoid When Buying an Ontario Business

  • Not having enough investment money: You know the purchase price when you are buying an existing business. However, what you don’t know is whether you may have some immediate expenses, such as for roof repair or a new vehicle. Make sure you have additional money available beyond the purchase price for these costs.
  • Not using written contracts: Although it can be tempting to speed up the purchase of an existing business with a “handshake agreement,” this rarely works out in your favor. Insist on having everything related to the purchase in writing, and make sure your attorney verifies the contract.
  • Not keeping emotions in check: It can be difficult, but you should not become emotional during the negotiations. If emotions are ruling your thought process, you’re more likely to make an error like overpaying for the business or skipping a great opportunity because of nerves.
  • Not keeping some funds in reserve: When negotiating the purchase price, give yourself some financial cushion. Ask the seller to allow you to hold back some of the purchase money for a few months until you are sure all promised assets and inventory are in place.
  • Not planning for the future: As you consider purchasing a business, try to picture what things will look like a few years and several years down the road. If you don’t see a future for this business beyond a decade because of changing consumer tastes or new technology, consider lowering your purchase price based on the future issues you expect the business to encounter.

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