Is your business an acquisition target? Take the quiz
Wondering whether your company has what it takes to catch a buyer's eye? Whether you are thinking of selling soon or just planning ahead, this quick quiz helps you assess how appealing your Canadian business is in the M&A market. Answer yes (1 point) or no (0 points) to each question, then tally your score.
1. Strong and predictable cash flow — consistent revenue growth over multiple years, high profit margins or recurring income such as subscriptions or long-term contracts
2. Competitive advantage and market position — unique products, proprietary technology, strong brand loyalty or cost advantages over competitors
3. Diversified customer base — no single client over 20% of revenue, with customers spanning industries or regions
4. Scalable operations — low customer acquisition costs, efficient systems and opportunities in new markets
5. Strong management team — experienced leaders who could stay post-sale, low staff turnover and a succession plan
6. Growing industry — a sector outpacing Canada's GDP growth, benefiting from technology or market trends, or seeing rising demand
7. Clean financials with low debt — minimal debt, transparent CPA-compliant financials and no lawsuits or tax issues
8. Synergy opportunities — overlapping customers, supply-chain savings or technology that could boost a buyer's operations
9. Proven growth and stability — steady revenue and profit growth over 3 to 5 years, low churn and resilience through economic dips
10. Proprietary assets or intellectual property — patents, trademarks, exclusive contracts or proprietary technology that set you apart
What does your score mean?
- 8 to 10 — prime target: you have most of the traits buyers look for and are likely to draw serious interest
- 5 to 7 — solid contender: real appeal with room to grow; focus on your "No" answers, like diversifying clients or cleaning up financials
- 0 to 4 — work in progress: start by tackling debt, building a team or finding ways to scale
Whatever your score, you can make your business more attractive — and the only way to know for sure how the market sees it is to test the waters with a valuation.
Key facts: is your business an acquisition target?
Ten traits scored yes or no, out of 10
Score bands: 8 to 10 prime target; 5 to 7 solid contender; 0 to 4 work in progress
Customer concentration: no single client should exceed 20% of revenue
Improvement levers: clean financials, diversify customers, cut debt, build a leadership team
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax or financial advice. Consult qualified advisors regarding your specific circumstances.
