How to Buy an Existing Small Business in Ontario
Purchasing an existing business in Ontario is an excellent choice for a small business investor looking to expand to international markets. Canada is friendly to foreign investors. The legal environment is stable and easy to understand. Strong incentives are in place for American investors to do business in Canada. Free trade initiatives also encourage more exchange between U.S. and Canadian markets.
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Instructions
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Research Ontario. The province is more than just the capital of Toronto; other major urban centers include London and Windsor. The surrounding suburbs of Toronto also provide excellent opportunities for small business. The majority of Ontario's power is not provided by fossil fuels, instead deriving from mostly hydroelectric and nuclear sources. Electricity costs in Ontario are some of the lowest in the developed world. The proximity to the northeastern U.S. provides buzzing opportunities for bilateral trade.
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Determine whether you're looking for an independent or franchise business. Franchise businesses arguably require less research, knowledge and business acumen, but potential profits are most often lower and your ability to make choices is restricted.
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Contact your local Canadian Trade Commissioner Service. Bureaus are located in most major U.S. cities and high population states. They can help field your specific questions about purchasing a business in Ontario.
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Learn about the business relationships that your target enterprise shares with other companies in Ontario. This will help you when you jump into managing the enterprise, while giving you a better sense of the shape of the local economy.
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Contact the Canada-Ontario Business Center. This trade bureau will provide more specific information about doing business in the province and will help to put you in touch with accounting and legal services relevant to the business that you're purchasing.
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Maintain good contact with the business owner that you're buying from. If you can't develop a good relationship with an owner, don't buy from him. You want to be able to use the former owner as a source of knowledge going forward, as you will likely need it as a foreigner purchasing a Canadian business.
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Comply with the Investment Canada Act. If the business you're purchasing has assets valued more than $5 million, it will be subject to review under the text of the act.
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