Buyers judge a business by the first document they see. Building the teaser, the CIM and the numbers behind them in the right order is what keeps that first impression from becoming the reason a deal stalls later.
Key takeaways
STEP 01 OF 10
Every later document inherits errors from this step. Reconcile the current and prior year against GST/HST and CRA filings, finish any incomplete interim statements, and list assets including anything under lease or financing — the sequence deavo’s own sale-readiness framework puts first, with the explicit caveat that “ninety days is not a formula… best read as a general framework rather than a target every business can realistically hit.” Deavo’s separate list of what lowers a sale price puts the same failure first: personal expenses run through the business and cash sales that do not reconcile against GST/HST filings.
STEP 02 OF 10
A pre-listing valuation changes the seller’s position from reactive to proactive. Treadstonelaw’s guidance names three approaches: asset-based (net of what the business owes), income-based (future earnings or cash flow discounted for risk), and market-based (how comparable businesses have actually traded where reliable data exists). Its stated benefit is concrete: “establishing a defensible baseline before receiving offers” and “flagging problems like customer concentration issues while there’s still time to address them.”
Deavo’s own tool runs the same three-step logic from the market side: SDE (profit plus owner’s salary, perks, interest, depreciation and one-time costs), multiplied by a sector-adjusted multiple, cross-checked against a revenue multiple, to produce a low-high benchmark range, not a single number — explicitly labelled illustrative, not an appraisal.
STEP 03 OF 10
A teaser should give a serious buyer enough to decide whether to sign an NDA — sector, general geography, size band, and the reason for sale — without naming the business, its exact location, or anything that would let a competitor or employee identify it before the NDA is in place. This is the anonymous end of the disclosure spectrum the data room later formalizes.
STEP 04 OF 10
A Confidential Information Memorandum is released after a confidentiality agreement is signed, and is deliberately positioned mid-spectrum — “more revealing than a teaser, but still short of everything a buyer will eventually see once a deal is closer to firm.” Its contents, per that same source: a business overview and brief history, a description of products and services and how the business operates, market position and competitive landscape, summarized historical financials with a normalized view of earnings, organizational and management structure, key assets, facilities or locations, and identified growth opportunities for a future owner.
Notice what is deliberately absent from that list: full financial statements, the customer and supplier names themselves, and anything that identifies the business beyond what the reader already knows from having signed the NDA. A CIM that goes further than this — naming actual customers, for instance — has effectively skipped ahead to deal-room-level disclosure without the tighter access controls a deal room usually carries.
STEP 05 OF 10
A buyer will price owner-dependence whether or not it is addressed in the marketing material — so address it. Deavo’s five signals (sales handled personally by the owner, no second point of contact on key accounts, undocumented processes, no second-in-command, licensing tied to the individual) are exactly what a CIM’s management-structure section should speak to directly: what has already been delegated, and what the transition plan covers.
STEP 06 OF 10
Advertising a business without deciding whether you are offering a share sale or an asset sale invites every serious buyer to ask the same first question. Confirm this before the CIM is finalized — it changes tax treatment, what liabilities transfer, and how financing works on the buyer’s side. Treadstonelaw’s guidance on the split notes share sales are generally exempt from HST, while an asset sale runs through the joint election mechanics instead.
The financing consequence is real and worth stating in the CIM itself: a buyer relying on Canada Small Business Financing Program funds cannot use them for a share purchase at all — ISED’s own programme FAQ states plainly that “you cannot use a loan to finance items such as share purchases or assets that a holding company acquires”, while the purchase of an existing business’s eligible assets may qualify. A seller insisting on a share structure for their own tax reasons is, at the same time, narrowing which buyers can finance the purchase without other capital.
STEP 07 OF 10
Deavo names an unrealistic asking price — “pricing based on what the owner needs rather than on how comparable businesses have actually traded” — as one of the five most common reasons a sale price ends up lower than it should. Anchor the number in the CIM to the independent valuation from Step 2, not the reverse.
STEP 08 OF 10
A serious buyer moves from the CIM to a letter of intent once they have enough to commit in principle. Treadstonelaw’s LOI guidance lists what it should cover: purchase price and payment structure, asset vs. share structure, conditions precedent, exclusivity period, proposed timeline, deposit terms, and employee and management intentions, with most terms non-binding but exclusivity and confidentiality “almost always binding.” Having the marketing documents ready to support each of those line items shortens the gap between interest and a signed LOI.
STEP 09 OF 10
As multiple buyers move through the teaser and CIM stages at different speeds, track which version of each document went to whom and when — a revised CIM issued mid-process (a corrected figure, an updated forecast) should not silently replace an earlier version without a record. This becomes the disclosure trail referenced later in the data room itself.
This matters most when a correction narrows the number a buyer already relied on — a normalized-earnings figure that drops between the first and second version of the CIM is exactly the kind of change a buyer will ask about at the letter-of-intent stage, and a dated version history answers the question cleanly instead of raising a new one about what else might have changed.
STEP 10 OF 10
A CIM and teaser generate questions no document fully answers — confirm before launch who fields buyer calls, who can speak to the financials without contradicting the CIM, and who is authorized to discuss price. A seller fielding these questions inconsistently across multiple advisors undermines the credibility the reconciled numbers were meant to establish.
This is also where an intermediary earns their role, if one is engaged: briefed properly, they can field the first round of buyer questions without the seller fielding every call personally, while still routing anything about price or structure back to the seller and their advisors.
A CIM’s promise of a “normalized view of earnings” only works if the add-backs are recomputed transparently. Suppose reported net income is $310,000. The owner draws a $145,000 salary for work a market-rate manager could perform for roughly $85,000, so add back the $60,000 difference. A one-time legal settlement of $40,000 also hit the same year’s results, so add that back too. Normalized SDE = $310,000 + $60,000 + $40,000 = $410,000 — both add-backs stated explicitly, not folded silently into a bigger number.
Applying deavo’s own published professional-services median multiple of 3.2× (illustrative benchmark for research context only, not an appraisal) as one data point: $410,000 × 3.2 = $1,312,000. Deavo’s own methodology cross-checks this SDE-based figure against a revenue multiple before presenting a range — treat a single multiple applied once, as here, as a demonstration of the arithmetic, not a substitute for that fuller cross-check.
The two documents are not just different lengths of the same pitch — they sit on opposite sides of the NDA, and that changes what can lawfully go in each. A teaser is written assuming a stranger with no confidentiality obligation will read it, so identity, exact figures and anything that would let a competitor recognize the business stay out by design. A CIM is written assuming the reader has already signed a binding confidentiality agreement — deavo’s own NDA form treats “the fact that the business is for sale” itself as confidential, which is exactly the fact a teaser has to convey without naming who it is about.
Confusing the two — putting CIM-level detail in a teaser, or CIM material that reads like a teaser — either leaks confidential information to unscreened readers or under-informs a buyer who has already earned more disclosure by signing.
There is no fixed Canadian benchmark. Deavo frames its own 90-day sale-readiness sequence as “a general framework rather than a target every business can realistically hit” — treat the order of steps as the guidance, not the day count.
No — the CIM is deliberately positioned short of everything a buyer eventually sees. Full liability disclosure belongs in the data room and, ultimately, the purchase agreement's representations and warranties, not the marketing memorandum.
Not necessarily. A market-facing valuation supporting an asking price and a valuation prepared for tax purposes (for example, supporting a lifetime capital gains exemption claim) can use different methodologies and different valuation dates — confirm with an accountant before assuming one serves both purposes.
Hold the line on sequence. Releasing deal-room-level material before the CIM and its NDA are in place undermines the staged disclosure the whole process depends on — see building and controlling a data room.
Either can, but whoever drafts it, have the seller's lawyer and accountant review it before release — see choosing and briefing an intermediary for how that division of labour typically works.
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Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
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