Buying a Business in Alberta
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Expert CPA Consulting

Thinking about buying a business? It's an exciting opportunity, but there's a lot to consider.

Make an informed investment decision based on solid projections and get help nailing down the best deal.

Business people anlyzing financials

Going it alone can be overwhelming and risky.

Team up with our CPA experts, who can guide you through evaluating and acquiring the business.

Contact Us

Pen on purchase agreement

Buying a business can be tricky: you need to know exactly what you're getting into.

It isn't just about choosing the right business. You need to deeply understand everything from its financial profile to its workforce capabilities to its reputation in the market.

Evaluating a business means scrutinizing its physical assets, poring over financial statements, and assessing its strategic fit with your personal and financial goals.

Let's make sure you're set up for success right from the start.

The Buying Process

Buying a business involves more than a few important steps. At Zenally, we're here to guide you through each one, making sure to handle everything smoothly and securely. Here's how we help you navigate the journey of buying a business:

Initial Consultation and Goal Setting

We begin by listening to what you're looking for in a business, including your goals, preferred industries, and key criteria. This process helps us customize our advice to fit your unique needs.

We'll also examine your social goals. These might focus on community engagement, such as creating jobs, improving local services, or implementing sustainable business practices that contribute to environmental stewardship. By clearly defining these goals, we can align your acquisition strategy to meet your personal ambitions and foster positive social change in your community.

Preliminary Evaluation

We examine the business that interests you to evaluate its overall health and how well it matches your objectives. This includes reviewing its financials and market position.

Assessment Planning

We'll create a detailed checklist of all the aspects of the business that need to be examined. If you have industry expertise, there will be some items you'll want to vet yourself. You can identify potential dealbreakers before you incur the cost of more rigorous financial assessments.

In-Depth Analysis and Purchase Evaluation

If the business makes it through the initial assessment, we conduct a detailed due diligence process. We examine everything from financial records to accounting compliances and operational efficiency to ensure you have all the insight you need.

Financing Potential for Business Acquisition

We assess the business's financial health to give you insights into whether it can support loan payments.

We check for consistent profitability, sufficient cash flow, and a healthy balance sheet. This evaluation indicates the amount of loan payments the business can support without straining its operations.

As well, we consider existing credit lines and any outstanding debts that might impact your financing options.

Valuation and Deal Structuring

Based on our findings, we help determine the right price for the business and suggest the best way to structure the deal. We make sure the terms are favourable to you and help minimize risks.

The logistics of transferring complex systems and processes are often overlooked. We'll help you with a detailed transition plan that includes training, transferring supplier relationships, and customer notifications.

Negotiations and Final Agreements

Armed with a solid understanding of the business's value, we can handle negotiations with the business owners to secure the best deal possible. Our accounting expertise ensures that all financial details are favourable and transparent.

Closing and Post-Purchase Transition

After you and the seller agree on a deal, we help you through the closing process and make sure the transition to new ownership goes smoothly. We offer advice on taking over operations and integrating the business's finances after the sale.

Ongoing Support and Advisory

Our support doesn't stop once you purchase a business. We continue to offer advice and help you manage your new business effectively, tackle any challenges, and plan for future growth.

With Zenally by your side, you have expert guidance at every step, making the complex process of buying a business much simpler and more secure.

Detailed Purchase Evaluations

A thorough evaluation gives you a clear view of what you're getting into: not just the physical assets, but also the financial health, operational strengths, and business reputation.

At Zenally, our job is to dig into every aspect of the business. We're here to uncover any hidden risks or opportunities that could affect your decision.

We don't just tick off items on a checklist.
We give you the analysis you need to make a confident choice.

Depending on your needs, these are some of the aspects of the business we can evaluate:

Financial Due Diligence

Financial Statements: Review the last 3-5 years of financial statements (balance sheets, income statements, cash flow statements).

Tax Records: Examine federal, provincial, and local tax returns for the past 5 years.

Accounts Receivable and Payable: Assess the age, turnover, and recoverability of receivables and the status of payables.

Debt Disclosure: Review all outstanding debts, leases, and liabilities.

Profitability Analysis: Analyze profit margins and compare them to industry benchmarks.

Inventory Analysis: Evaluate the condition and value of inventory on hand.

Legal Due Diligence

Corporate Records: Check the Articles of Incorporation, bylaws, minutes of major meetings, and shareholder agreements.

Contracts and Leases: Review all existing contracts and leases to which the business is a party.

Litigation: Investigate any past or pending litigation.

Intellectual Property: Assess the status and protection of patents, trademarks, copyrights, and other intellectual property.

Regulatory Compliance: Verify compliance with all relevant laws and regulations.

Operational Due Diligence

Business Operations: Understand the day-to-day operations, supplier relationships, and customer base.

Employee Details: Review employee structure, contracts, benefits, and past or pending labour issues.

Asset Evaluation: Examine the condition and age of physical assets like buildings, machinery, and technology.

Market Position: Analyze market trends, competition, and the business's place in the industry.

Strategic Fit

Growth Opportunities: Identify potential areas for business development.

Synergies: Evaluate how well the business fits with the strategic goals of any of your existing operations. How does it support your financial, personal, and social goals?

Environmental Due Diligence

Environmental Assessments: Review any environmental audits and ensure compliance with environmental regulations.

Risks: Identify any environmental liabilities, such as contamination or disposal issues.

Technology Due Diligence

IT Systems and Security: Assess the IT infrastructure, software licenses, data security measures, and any technology-related liabilities.

Technology Integration: Consider the costs and challenges of integrating the business's technology with existing systems.

Internet Access: Determine if Internet access is sufficient for the operation and marketing of the business.

Provincial Regulations and Compliance

Alberta-specific Regulations: Ensure compliance with Alberta's provincial laws concerning employment, health and safety, and industry-specific regulations.

Alberta Energy Regulator (AER) Compliance: Verify compliance with AER standards and regulations for businesses in the energy sector.

Economic and Geopolitical Factors

Impact of Oil and Gas Prices: Since the oil and gas industry heavily influences Alberta's economy, assess how fluctuations in these markets might impact the business.

Trade Agreements and Tariffs: Understand any local implications of national and international trade agreements, particularly those affecting Alberta's key industries.

Local Market Conditions

Regional Economic Health: Evaluate the economic stability of the region where the business operates, including unemployment rates, major economic drivers, and economic development trends.

Local Competition: Analyze the competitive landscape, specifically in Alberta, considering local competitors and market saturation.

Tax Implications of Buying a Business in Alberta

Tax Strategy: Assess the implications of a purchase on your tax strategy and resulting cash flow.

Local Property Taxes: Check property taxes, especially if the business owns significant real estate assets in Alberta.

Estate Planning: Consider the impact of your business acquisition on estate planning, ensuring your investment aligns with your succession planning goals.

Cultural and Demographic Factors

Workforce Demographics: Understand the labour demographics, including standard practices, worker availability, and any regional workforce trends.

Cultural Considerations: Account for local business practices and cultural aspects that influence Alberta's business operations and employee relations.

Environmental Concerns Specific to Alberta

Environmental Impact: For businesses in natural resource sectors, assess the environmental impact and ongoing obligations under Alberta's environmental laws.

Land Use and Water Rights: Examine any issues related to land use, especially in rural and agricultural areas, and water rights, which are critical in Alberta.

Exit Strategy

Resale Value: Estimate the business's resale value and potential exit strategies.

Contingencies: Plan for scenarios that might necessitate a quick exit or divestiture.

Assessing Business Value

To buy a business in Alberta, determining its true value is one of the most important steps.

It's not just about looking at the current financial statements; it requires a comprehensive analysis to ensure you make a sound investment.

Zenally uses various financial analysis methods to get an accurate picture of a business's worth:

  • Historical Earnings Evaluation: We look at past earnings, adjusting for anomalies to predict future performance.
  • Asset-Based Valuation: This method involves assessing the value of the business's tangible and intangible assets.
  • Market Comparison: Here, we compare the business with similar companies in the industry that have recently been sold, giving us a market-centric view of what the business could be worth.
  • Discounted Cash Flow (DCF) Analysis: We project the company's future cash flows and discount them back to the present value, providing a dynamic view of the business value.

These methods ensure that the Alberta business valuation is fair and closely aligned with market realities and future potential.

Our expertise in financial analysis allows you to approach the purchase with a clear understanding of what you are paying for and the economic benefits you can expect. This meticulous approach to valuing a business helps safeguard your investment and paves the way for a successful acquisition.

Structuring Deals to Meet Financial Objectives

We focus on structuring deals tailored to fit your specific financial objectives. Here's how we assist you in crafting an agreement that aligns with your financial aspirations:

Explore Different Acquisition Structures

  • Asset Purchase: Ideal for those who want to avoid inheriting the company's previous liabilities. This structure involves purchasing business assets directly, which can be beneficial for tax reasons and risk management.
  • Share Purchase: This might be the right choice if you want to take over the entire entity, including all assets and liabilities. It's often simpler in terms of transactions but requires careful due diligence.
  • Hybrid Deals: Sometimes, a combination of asset and share purchases can be structured to optimize tax advantages and financing options.

Optimize the Financial Structure

With each of these structures, Zenally works to optimize the terms to ensure they meet your financial goals. We help negotiate favourable payment terms, secure financing arrangements, and structure the deal to minimize tax liabilities.

Conduct Scenario Analysis

We perform detailed scenario analyses to forecast how each deal structure could play out under different economic conditions. Entrepreneurs need to understand the potential risks and rewards associated with each option, ensuring a well-informed decision.

Why Choose Zenally As Your Business Acquisition Ally?

With Zenally's expertise, you're not just purchasing a business; you're making a strategic investment structured to achieve your specific financial objectives.

We have decades of experience in purchasing diverse businesses, including:

  • agriculture
  • tourism
  • oil & gas services
  • real estate
  • technology
  • construction
  • retail
  • health services

Let's make sure your deal is structured to boost your returns and fit perfectly with your investment strategy.

We're here to help you get the most out of your business purchase.

Contact us.

Zenally, Your Business Ally

ZENALLY

Chartered Professional Accountants LLP

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Payments

Please send eTransfers to
etransfer@zenally.cpa

Red Deer

(403) 343-2723

reddeer@zenally.cpa

516 Laura Avenue
Red Deer County, AB
T4E 0A5

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Innisfail

(403) 227-4590

innisfail@zenally.cpa

5031  49 Street
Innisfail, AB
T4G 1A4

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DISCLAIMER: Any accounting, business, or tax advice contained on this website is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion.

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