PST/GST/HST: What You Need to Know When Buying a Business in Canada

 

**New Video Alert!

In this video, I explain how GST, HST, PST and QST can affect a Canadian business acquisition structured as an asset purchase. We look at the GST44 election, the "all or substantially all" test, GST/HST registration, purchase-price allocation, and why provincial sales taxes can still apply even when a GST44 election is available.

I also explain why buyers in British Columbia, Saskatchewan, Manitoba and Quebec may face additional considerations, and why equipment, inventory, goodwill, vehicles, real estate and post-closing services may receive different tax treatment.

Cheers

See you over on YouTube: https://youtu.be/41LcwPSLwXM 

David C Barnett

A great interview with the host GG The Franchise Guide Giuseppe Grammatico

 

Business valuation, deal-making frameworks & exit strategies — franchise consultant Giuseppe Grammatico welcomes back ALL-TIME record holder David Barnett for his 9th appearance on The Franchise Freedom Podcast to discuss his powerful new book, Business and Asset Values: How Owners, Buyers, Sellers, Lenders and Advisors Should Think About Small Business & Equipment Value. This is a masterclass in understanding what your business is REALLY worth — whether you're a buyer evaluating acquisitions, a seller planning your exit, or an aspiring franchise owner weighing your options.

Premiere - Who's going to own your small business with Michael Kerr

 

Who's going to own your small business 

New guest – Michael Kerr

I’m joined by Michael Kerr, founder of Kerr Capital and an Australian business broker and small business adviser, to explore why selling a business is far more complex than selling a house.

Tune in as we discuss business succession planning, realistic valuations, employee buyouts, community ownership, preparing a business for sale, and why key employees may be the most natural buyers.

We also examine the “silver tsunami,” the risk of vital local businesses closing, and how owners can create better exit options before time runs out.

This is a must-see event for business owners, buyers, brokers, advisers, and anyone planning a small business exit.

Join us live to ask questions. A replay will be available.

Set a reminder on YouTube:  https://youtu.be/VfNuUc4w0js 

It will be going live Thursday September 10, 2026 at 2:30 PM Atlantic Time and 1:30 PM Eastern Time

See you there!

David C Barnett

What Is Your Business Really Worth? (New Book Out Now)

**New Video Alert!

What is a business really worth? The answer isn't always one number.

My new book, Business and Asset Values, is designed for business owners, buyers, sellers, lenders, accountants, lawyers, advisors, and anyone who wants to better understand how businesses and their assets are valued.

In this video, I introduce the ideas behind the book, including fair market value, liquidation value, business valuation methods, SDE and EBITDA, cash flow, debt, working capital, goodwill, transferability, and why buyers and sellers can look at the same business and reasonably reach different conclusions about its value.

Cheers

See you over on YouTube:https://youtu.be/-1C9gmAViUQ 

David C Barnett

Would You Sell Your Business With 100% Seller Financing?

Selling a business to a trusted employee can feel like the ideal succession plan.

They already know the company, understand the customers, and may have spent years helping build the operation.

But if you finance the entire purchase yourself, you're not simply selling the business.

You're also becoming the bank.

That creates an entirely different set of risks.

Start With Your Own Financial Position

Before deciding whether to provide 100% seller financing, look at your own financial needs.

Ask yourself whether you need the sale proceeds immediately, whether you have other retirement assets, and whether you could financially survive if the buyer stopped making payments.

If your retirement depends entirely on receiving those payments, financing the full purchase price may create too much exposure.

Evaluate the Business First

The strength of the business matters just as much as the strength of the buyer.

Consider:

• Cash flow

• SDE or EBITDA

• Tangible assets

• Goodwill

• Working capital

• Overall marketability

A highly desirable business gives the seller more options.

If the company would be difficult to sell on the open market, an internal succession may become more attractive—but that doesn't eliminate the financing risk.

Evaluate the Employee Like a Banker

A long-term employee may understand the business extremely well.

That doesn't automatically mean they'll be a successful owner.

Entrepreneurship requires different skills, including financial discipline, decision-making, risk tolerance, and the ability to manage uncertainty.

Look carefully at whether the buyer has accumulated savings, demonstrated financial responsibility, and shown a willingness to invest personally in the transaction.

Where Is the Buyer's Skin in the Game?

One of the biggest concerns with 100% seller financing is that the buyer may have very little financially at risk.

A stronger transaction might include:

• A down payment

• Personal guarantees

• Additional collateral

• Home equity

• Liens against other assets

The more the buyer has at stake, the stronger their incentive may be to work through difficult periods instead of simply walking away.

Structure Matters

An asset sale and a share sale can create very different levels of risk.

If you're financing a share purchase that includes inventory, receivables, cash, and working capital, you may be financing much more than just equipment and goodwill.

An asset transaction where the buyer provides their own operating capital may reduce some of that exposure.

The important question is: exactly what are you financing?

Seller Financing Means Staying Connected

If you finance the purchase, your relationship with the business may continue for years.

You may want ongoing access to:

• Financial statements

• Bank statements

• Receivables

• Payables

• Balance sheets

• Key financial ratios

Loan covenants and reporting requirements can also help protect your position.

If your goal is to sell and completely walk away, 100% seller financing may not match that objective.

Consider a Staged Buyout

A gradual ownership transition can sometimes provide a better alternative.

Instead of transferring the entire company immediately, an employee can purchase ownership over time while assuming greater responsibility.

This gives both sides an opportunity to see whether the transition works before the seller gives up complete control.

It may also allow the employee to build equity and financial strength along the way.

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Key Takeaways

Selling a business and financing the buyer are two separate decisions. Before providing 100% seller financing, evaluate the buyer's financial strength, your own ability to absorb a default, and whether a staged transition could reduce the risk.

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Why your business isn't worth what you think | Gregory Kovsky

 

Your business may not be worth what you think. Business value depends on market demand, location, cash flow, risk, deal terms, financing, and whether a buyer can successfully take over. In this interview, veteran business broker Gregory Kovsky explains how buyers and sellers determine fair market value, why misleading comparables and unrealistic expectations kill deals, and how seller financing can increase confidence and support a successful transition. Learn: ✔ What truly determines business value ✔ Why comparable sales can mislead ✔ How location affects valuation ✔ Why seller financing matters ✔ Which financial numbers owners should track ✔ How to prepare a business for sale

WHY BUYING AN EXISTING BUSINESS BELONGS ON MORE ENTREPRENEURSHIP CONFERENCE AGENDAS

 Entrepreneurship is not synonymous with starting from zero

Most entrepreneurship programming is built around the start-up story: identify an idea, validate demand, create a product and find customers. That path is important, but it is not the only way to become a business owner. Buying an existing company can provide customers, employees, equipment, supplier relationships and cash flow on the first day. It also creates a different set of risks that many would-be owners have never been taught to evaluate.

The ownership transition is already happening

Across many communities, established owners are considering retirement. Some businesses will pass to family members or employees. Others will be sold to outside buyers. Still others will quietly close because no successor is found. When an otherwise viable local company disappears, a community can lose jobs, services, supplier spending, tax revenue and accumulated know-how. Teaching acquisition entrepreneurship is therefore not only about individual opportunity; it is also a practical form of local economic development.

Buying reduces some risks and introduces others

An operating business has evidence. A buyer can examine sales history, margins, customer concentration, payroll, equipment, leases and working-capital patterns. Yet historical numbers do not make the opportunity safe. Buyers can overpay, misunderstand owner dependence, underestimate reinvestment, accept poor deal structures or discover that reported cash flow cannot support both the business and acquisition debt.

A useful session changes the questions people ask

Many prospective buyers begin with superficial questions: What type of business is exciting? How much revenue does it have? Can I afford the asking price? Better questions include: Why do customers continue to buy? Which relationships belong to the company rather than the seller? How much cash must remain in the business? What capital expenditures are approaching? Can the buyer replace the owner’s labour and still service the debt?

The topic should not become a sales pitch

Acquisition entrepreneurship is sometimes presented as a shortcut to wealth. That framing is hazardous. The educational objective should be judgment, not enthusiasm. Attendees should leave better able to reject a bad opportunity, not merely more motivated to find one.

Speaker resource: David C. Barnett speaks to entrepreneurs, lenders and economic development audiences about buying existing businesses, evaluating risk, understanding cash flow and structuring transactions that can survive after closing. He is the creator of the Business Buyer Advantage program which helps people buy a successful, mature, cash flowing business while controlling risk.