1. Interest rates are currently historically low. Business valuations are very sensitive to interest rates just like any other capital assets. Lower interest rates increase affordability and increase demand for businesses. Supply of businesses for sale on the other side decreases because some business buyers will be attracted to the higher return debt markets. There is a consensus that interest rates might increase in the near future, which makes today a real opportunity for business sellers.

2. A large number of unemployed skilled workers are looking for job replacement opportunities. The number of corporate layoffs has risen dramatically in the US and Canada in the previous few months. Laid-off employees have hard time finding decent jobs in today’s economy. A large number of these unemployed capable workers are now looking for businesses to buy.

3. Baby Boomers are getting closer to the retirement age. Baby Boomers who own businesses are starting to retire in large numbers. The number of businesses that will be sold for retirement reasons will rise dramatically in the next 10 years. This will increase the supply of businesses for sale and might depress the market in the near future. Selling in today’s market will enable sellers to avoid a probable depressed future market .

4. In the province of Ontario, Canada the Capital Gain Tax Exemption has been raised to $750,000.00 per shareholder for the sale of company shares. This is a huge tax incentive for today’s business sellers . This might not last for long as governments in North America might increase the historically low capital gain tax rates to balance their huge deficits created during this financial crisis.

5. The economy is expected to recover from recession. Most experts agree that the economy is on its way to recovery. This has recently fueled the business for sale market as potential buyers are feeling more optimistic about future economic prospects. Some business sellers are waiting for a full economic recovery to get the best possible price for their businesses but this is a rarely good strategy for two simple reasons. First, other not so favorable factors will kick-in in the future and second the recovery might take much longer than expected.

6. Supply of viable businesses available for sale is now very low. A large number of business sellers were scared of the negative impact of recession on their business sale prices. As a result, many potential sellers are now on the sides waiting for the economy to recover before putting up their businesses for sale. This is defectively an opportunity for new sellers to jump in.

While there is no exact science that can predict future market behavior, business owners in the US and Canada looking to sell their businesses should consider the above factors before delaying the sale of their companies even further and miss today’s market opportunity.

Three unique aspects make selling a business in Toronto much easier and more lucrative than in most other cities in North America:

• Ethnic diversity of its population: Diversity is good for business and can make markets much more liquid (frequent transactions). Different ethnic populations have different perceptions of happiness and different needs, so a business that doesn’t fit with people from a particular ethnic background might be an excellent fit for another ethnic background. For example gas stations and convenience stores require long hours of work and provide a relatively low return on investments. In spite of these disadvantage, these businesses are in great demand especially from recent immigrants. A number of recent immigrants lack language skills to operate a business with high social interaction so they perceive this type of businesses as ideal. Moreover the lack of job opportunities leave them with few other options. And finally sometime larger families provide buyers with a cost effective labour advantage.

• Immigration: Canada is one of the very few countries that is very open to immigration. One of the possible options for new immigrants is the purchase of a business that employs Canadian residents. This option is however underused since most immigrants use other options available. Moreover, immigrant coming to Canada are more entrepreneurial  by nature (otherwise they would not have risked everything they have to come to Canada). Very frequently, they choose to buy a business quickly after realizing that their future as employees might not be as bright as they expected.

• Concentration of population: A large market is generally more liquid than a smaller one. The number of business owners desiring to sell and potential individuals and/or companies looking to buy increase the possibilities of matching buyers’ and sellers’ needs.  As a good analogy, finance professionals know that large capitalization (total company value in the stock market) companies  have more liquid stocks than small capitalization companies.

For all these reasons, it’s mach easier to sell a business that is located in Toronto than a business in a small town in North America. Furthermore, even business valuations are higher in Toronto. Liquidity increases price. A buyer will offer a higher price if he/ she knows that it will be easier to sell the business if it ends-up been not what they expected it to be.

Unfortunately, not all business sellers take advantage of  the Toronto advantage when they sell their businesses. If the business is not exposed to the market for a reasonable time with adequate advertising then it will not sell for the best possible price. unfortunately, business owners selling with no professional help end-up leaving a lot of value on the table.