How long it takes to sell a business in Canada
Six to ten months from market to close is the honest answer. Here is where the months go, stage by stage, and which of them you can shorten.
A confidential sale of a Canadian business typically takes six to ten months from market to closing. Finding buyers takes two to four months and due diligence six to twelve weeks, with about a month each for the letter of intent and closing. Preparation adds up to a year beforehand, and it is where most of the price is made.
The short answer, and where the time goes
A sale takes six to ten months from the day the business goes to buyers to the day the money lands. That figure assumes an owner operated business in Canada, sold by an advisor with the documents prepared and more than one buyer at the table.
Most of that time is work. A buyer is deciding whether to spend a large sum on a business they can only partly see from outside. The stages below are where the months go.
Before market: up to a year
Buyers price the last two or three years of financial statements. Anything you change now shows up as one partial year in the numbers a buyer sees in twelve months. That is why preparing a business for sale takes as long as it does.
This is also the stage in which a share sale is set up so that the lifetime capital gains exemption is available, sheltering up to $1,275,000 of gain per person in 2026. The tests look back 24 months, and purifying a company of surplus cash takes time. An owner who decides to sell and goes to market the same season has usually given the exemption up.
Preparation is optional. A business can go to market next month, and buyers will price it as it stands next month, before the year of work that might have raised the figure.
Finding buyers: two to four months
An anonymous profile goes to buyers who have said what they are looking for. Each one who asks to know more signs a non-disclosure agreement and is approved by you before seeing the name and the statements.
The time here belongs to the buyers. A private equity firm answers to a committee and a strategic acquirer to its board, while an individual buyer needs a spouse and a bank to agree. Two months is a fast market, and four is normal for a business that several kinds of buyer could want.
What shortens this stage is a ready profile with the statements ready behind it. A buyer who asks a question and waits a week for the answer is a buyer who has started looking at something else.
Letter of intent: two to four weeks
A buyer who wants to proceed writes down the outline of the deal: price, structure, timetable, conditions. Going back and forth on that outline takes two to four weeks, and it is time well spent, because the letter of intent fixes the anchor for everything after it.
Signing it starts exclusivity, typically 45 to 90 days, during which you deal with this buyer alone. That is the reason to have two or three buyers at this stage, because the leverage ends when the letter is signed.
Due diligence: six to twelve weeks
The buyer, with an accountant and a lawyer, checks what you have told them. They test the statements against bank records and the revenue against contracts, then read the lease and the tax filings, among much else. The due diligence checklist sets out what they ask for.
Six weeks is a business whose documents were in a folder before the buyer asked, and twelve is one answering each request from scratch. Beyond twelve, something has usually been found, and the conversation has moved from timing to price.
Three things reliably add weeks here, and all three are visible a year in advance:
- Financial statements that disagree with the tax filings, or personal costs run through the business and left unidentified.
- A lease with less than two or three years to run, or one the landlord has to consent to assigning.
- One customer who is most of the revenue and still unaware of the sale, which leaves the buyer unable to ask whether they are staying.
Closing: three to five weeks
The purchase agreement is drafted from the letter of intent while the buyer’s financing is confirmed in writing. Consents come in from the landlord and any key contract, and a date is set. On the day, funds move and the business changes hands.
Financing is the usual source of delay here. A buyer who said the bank was lined up, and meant only a conversation with the bank, adds a month. Ask for the commitment letter during diligence, well ahead of closing.
After closing
Most deals include a transition period of a few months in which you stay on, paid, to hand over customers and staff. Some include an earnout, in which part of the price is paid over one to three years if targets are met. Both sit outside the sale timeline and inside your calendar.
What you can shorten, and what sets the pace
| Stage | Typical length | In whose hands |
|---|---|---|
| Preparation | Up to a year | Yours entirely. Start earlier. |
| Finding buyers | Two to four months | Mostly the buyers’. Readiness helps. |
| Letter of intent | Two to four weeks | Shared. Give it the weeks it needs. |
| Due diligence | Six to twelve weeks | Mostly yours, a year in advance. |
| Closing | Three to five weeks | The lawyers’ and the bank’s. Ask early. |
The time you can save sits at the front, in preparation, while the time at the back belongs to other people’s processes. Owners who want a fast sale should take the year of preparation. A free valuation shows where the business stands before that year begins.
Questions owners ask
- What is the fastest a business sale can close?
- Three to four months from first conversation to closing is possible when the buyer is already known and the financials are in order. Such deals are rare, and most of the time they save was spent earlier, in preparation.
- What causes business sales to take longer than expected?
- Statements the buyer finds unreliable and a lease left unresolved both add weeks, as does one customer who is most of the revenue. Financing the buyer assumed and had yet to arrange can add a month at closing. Each of these is cheaper to fix before the sale than during it.
- How long does due diligence take when selling a business?
- Due diligence takes six to twelve weeks for an owner operated business. It is shorter when the books are clean and the documents are ready before the buyer asks, and longer every time a question has to be answered from scratch.