For most owners, selling a business isn’t complicated because of the business itself.
It’s complicated because the sale process is unfamiliar and often feels daunting.
That’s especially true for owners of privately held businesses across Western Canada, where many companies are founder-run, relationship-driven, and deeply tied to their local markets.
Legal terms like EOI, LOI, due diligence, and SPA get thrown around quickly, often without much explanation. We have put together a straightforward overview of how a typical business sale unfolds, and what each stage really means for owners considering a business transition in British Columbia, Alberta, and the Prairies.
Step 1: Initial Conversations and Preparation
Most sale processes start quietly. Many sellers don’t want their employees, customers, or competitors to learn that they’ve begun to consider the possibility of a transition, making confidentiality key. To protect owners, after understanding that a business is either for sale or is considering a transition, we sign a mutual non-disclosure agreement (NDA) to protect both parties. This ensures security of information being shared.
For many Western Canadian businesses, this stage reflects realities such as:
- Founder-led operations in trades, industrial services, or professional services where word travels quickly among staff and across companies
- Needing to respectfully handle the status of long-tenured employees and customer relationships built over decades
- The presence of regional customer bases in places like the Lower Mainland, Fraser Valley, Interior BC, Calgary, Edmonton, or mid-sized Prairie communities that have their own unique situations
At this stage, the focus for conversations between potential sellers and buyers is on:
- Personal goals and timing
- What responsibilities a new owner would be inheriting
- High-level financial performance and business dynamics
Nothing is binding here other than the NDA, as this is about orientation rather than commitment. Having high-quality advisors such as an experienced accountant and M&A lawyer to help best set your business up for sale are a major benefit to both sellers and buyers alike at this stage and will continue to be throughout the process.
Step 2: Initial Buyer Interest (EOI)
Once we have a basic understanding of the business and feel like we have a sense of what makes it work, we may submit an Expression of Interest (EOI).
An EOI is:
- Non-binding but shows interest and intent
- High-level deal elements including valuation and typical structure
- A way for buyers to share what relevant skills or background they have which would benefit the business
- Based on limited information from financial summary and 1-2 conversations
An EOI outlines a range of value and a general sense of deal structure. For sellers, especially those running service or industrial businesses in Western Canada, this stage helps confirm whether buyers like us understand the nature of the business’s local customers, hands-on operations, and practical constraints.
For sellers, an EOI answers one key question: Is there alignment with sellers that this worth pursuing further?
Step 3: Letter of Intent (LOI)
If both sides want to proceed, the next step is typically a Letter of Intent (LOI).
Before the LOI is submitted, the seller will share information such as 3 years of historical financial statements, current balance sheet, organization structure, and relevant business information (e.g., backlog of work). This is usually about 3-5 documents, as the deeper conversations happen once both parties have signed the LOI.
An LOI is similar to an EOI, but far more detailed. It typically covers:
- Purchase price and structure (cash, retained equity, delayed payments, or earn-outs)
- Expected working capital at transition (more on this in another article)
- Owner’s post-closing role and expected transition period
- Exclusivity (the buyer usually asks to be the sole party during diligence)
While most economic terms are not legally binding, exclusivity usually is. Signing an LOI signals serious intent from both sides to dedicate time and effort into making a deal a reality.
For owners of closely held businesses, common across BC and Alberta, this is often the point where the process becomes more intensive as diligence begins.
Step 4: Due Diligence
Due diligence is where the buyer validates what they believe they’re buying.
This phase can feel invasive, particularly for owners who have run their business with lean systems and informal processes. That’s common across many Western Canadian service businesses, and it’s not a red flag. The most important part of this phase is openness and transparency.
Buyers are typically reviewing:
- Detailed financial records and understanding the quality of earnings
- Customer and supplier relationships
- Key employees and compensation
- Contracts, leases, and assets
- Legal, regulatory, and compliance matters
Good diligence isn’t about “finding problems”, but more about understanding the business well enough to own it responsibly. There can be a temptation to gloss over or downplay potential problems at this stage out of a fear that their discovery will lower value. This is almost always a mistake, as this results in a slower, more emotional process where parties are constantly re-evaluating as problems are “discovered”, something that often kills viable deals. Everything is much smoother when all the information is out in the open from the start and the diligence process becomes about verifying facts about the business rather than finding “skeletons”.
Step 5: Definitive Agreements (SPA)
Once diligence is substantially complete, lawyers begin drafting the Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA), depending on deal structure. We’ll compare the benefits of each in a future article, but for now they’re largely the same when it comes to how they affect the timeline.
The SPA sets out:
- Final purchase price and adjustments
- Description of assets in the business
- Representations and warranties about the business from the sellers
- Indemnities and risk allocation
- Closing conditions and timing
This is the legally binding document governing the transaction. While it can feel technical, its purpose is straightforward: clearly define what’s being bought, what’s being promised, and how risks are handled.
For many owner-operators, having M&A legal advisors who understand Western Canadian deal norms makes this stage far more manageable. There are ‘standard’ terms that many experienced M&A advisors will be aware of for comparable deals and their guidance becomes very valuable to ensure deal terms are fair to both parties.
Step 6: Closing and Transition
Before closing, other documents such as a lease agreement, non-compete agreement (NCA), and consulting agreement are signed. These other agreements will be the topic of their own article, but their general purpose is to handle the transition of items like leases on real estate or what the founder’s role will be immediately following the deal closing. Once those documents and the SPA are signed and closing conditions are met, the transaction closes is a structured manner through the legal teams of both parties.
For many owners, that moment is emotional, but it’s not the end of the journey. Most successful deals include a transition period where:
- Customer and supplier relationships are handed over thoughtfully
- Knowledge is transferred
- Employees gain confidence in new ownership
- Sellers remain partially involved via a consulting agreement for a defined period to ensure continuity
Done well, this stage protects both value and legacy, especially in businesses where reputation and relationships matter.
Our Perspective
A good sale process shouldn’t feel rushed, confusing, or one-sided. In many cases, it feels less like a negotiation and more like a working relationship over several months.
At Salt & Soil, we work primarily with owners of established businesses across Western Canada, often in service, industrial, and manufacturing sectors, who care deeply about what happens after closing.
We again emphasize the importance of having a quality accountant and M&A lawyer to work with you through the process. Those advisors are key, both for sellers maximizing value and for helping the deal along and making sure everything can close properly.
We believe clarity builds trust. Sellers deserve to understand each step, why it exists, and what to expect as the process unfolds.
If you’re considering selling a business in British Columbia, Alberta, or the Prairies, understanding the mechanics of the process is often the first step toward making it a good one. We are happy to hop on the phone to discuss further, even if you aren’t planning to transition for another few years.