Why Business Sales Are Delayed in BC

A signed offer is one step in the process

Business sales involve several people reviewing different parts of the transaction. A delay often starts when an important dependency is discovered after the parties have agreed on a target date. At the beginning, assign each outstanding item to a person and agree when it must be resolved.

Harry can coordinate the marketing and transaction conversation. The buyer and seller still need their own legal, accounting, financing and other advice appropriate to the transaction.

Financial records do not tell one consistent story

Differences between bookkeeping, tax filings, POS records and bank deposits require explanation. Avoid substituting an unsupported earnings claim for the records a buyer or lender needs.

• Prepare recent statements and current year-to-date results.
• Explain unusual expenses and owner adjustments with supporting records.
• Agree which records may be shared and use a controlled process after confidentiality requirements are met.

The lease or premises require more work

A business may depend on its location, permitted use, equipment installation or renewal options. Ask a commercial lawyer to review the actual assignment clause and advise on landlord consent, guarantees, deposits and any new lease terms. Do not assume that agreeing on a business price secures the premises.

• Obtain the complete lease and amendments early.
• Identify what the landlord needs to review a proposed buyer.
• Resolve inspection, permitted-use and equipment questions before removing relevant conditions.

Financing and the working-capital plan are incomplete

An asking price is only part of the funding requirement. Buyers should discuss inventory, deposits, professional costs and operating cash needs with their lender and accountant. Finance approval may depend on the deal structure and supporting records; an initial conversation is not a funding commitment.

Approvals and tax steps are left until closing

Licences, permits, franchise approvals and transferable contracts must be reviewed for the specific business. For a liquor business, consult the BC Liquor and Cannabis Regulation Branch about the applicable licence and transfer process. Ask the accountant and lawyer to confirm PST treatment and any relevant clearance-certificate steps using current BC government guidance.

The parties mean different things by “included”

Write down the assets, inventory treatment, excluded property, assumed obligations and expected seller training. Have advisers resolve the agreement wording. A clear issues list helps everyone distinguish an unanswered question from an agreed term.

• Identify the issue, responsible person and next action.
• Keep a shared schedule for conditions, approvals and closing steps.
• Discuss changes through the representatives and legal advisers before promising a new completion date.

Prepare for the first conversation

Sellers can begin with a general business description, location, timing and the records available. Buyers can begin with their budget, experience and financing position. Do not send customer lists, payroll files, bank statements or identifying documents through a public enquiry form.