• Last Updated:
  • Aug 31st, 2014 9:30 am
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[OP]
Jr. Member
Jul 28, 2014
123 posts
15 upvotes
Toronto, ON

Buying Small Business

Hello All,

So I am currently in discussion with an individual regarding potentially buying out her dog walking business as she is returning to school and will not have time to operate it as such, however, the initial purchase of a small business is not something I have experience with. The past week of google searches has netted me with very little in terms of actual knowledge outside of being aware of tax issues and a search with the toolbar above of 'buying small business' did not result in any hits, something I did not understand.

If anyone could provide me with any direct links to perhaps a step-by-step guide for buying a business in Ontario, Canada or those who have done it before could provide me with a phone number/address of a location to speak with someone directly to look into beginning this process.
4 replies
Deal Addict
Oct 14, 2004
1397 posts
367 upvotes
Toronto
Is it really worth buying a dog walking business? I mean, if it is a thousand bucks, then maybe for the contacts, but anything more than that wouldn't be worth it. Normally businesses which sell have something which is not easy to replicate on your own.
[OP]
Jr. Member
Jul 28, 2014
123 posts
15 upvotes
Toronto, ON
The business based on the income statement, asset allocation tables, cash flow statements so far all show the business makes after taxes and salaries are paid out close to $15,000 annually, after she paid herself a salary as well, which I have not had audited as of yet, but I have completed my CIM and work for an FI so I do understand what I am looking at at this point. I have no interest in walking the dogs, and would be looking at simply the annual surplus to be where I would look to draw from as I would be replacing her.

And yes, she is selling for close to $1,500 and has a non-competition clause written into what she has offered me and the contracts of all of her employees.

That being said. I don't know where to start regarding who to speak to first, have everything audited, then buy out, then create new small business accounts, then deal with CRA. It is more of a make a checklist/have a checklist.
Deal Addict
Oct 14, 2004
1397 posts
367 upvotes
Toronto
It likely wouldn't be worth getting it audited in the traditional sense. Believe that alone can cost 4-5k/yr as the accounting firm needs to verify that all receipts are there, are allocated to the correct accounts, etc.

Beyond that, you need to make sure everything is transitioned to you properly, that you are afforded a good look at the books (not just the statements, but receipts, etc.) and know the different processes.

For such a small business, it likely wouldn't be too major of a transition.
Deal Addict
Oct 29, 2010
4267 posts
622 upvotes
You will probably need a lawyer to make an agreement and verify that she owns everything and is transferring everything to your name/company's name.
Assuming she has a CRA account you can call them and ask about transferring it.
Keep in mind that if it's a corporation it will probably cost you 1k-2k per year to do the accounting.

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