Planning an IPO or Sale: Getting Your Financials in Order Early

For Canadian small and medium-sized enterprises (SMEs) – especially those based in Quebec – preparing for an exit (whether through an initial public offering or a private sale) is a complex undertaking that hinges on rock-solid financial preparation. Investors and buyers in 2025’s cautious market climate are prioritizing well-prepared companies with strong fundamentals auditboard.com, so the earlier you start getting your financial house in order, the better. This comprehensive guide will walk you through the essential steps to get your financials exit-ready, covering everything from audited statements and internal controls to tax planning, due diligence, forecasting, and working capital management. We’ll also address local regulatory nuances – like Canadian Securities Administrators (CSA) rules for IPOs, Revenu Québec considerations, and bilingual documentation. Finally, we’ll outline timelines, team composition (lawyers, auditors, CFOs), and how Mackisen can partner with you to ensure a smooth, successful exit with integrated CFO and accounting support.

Why Start Now? Preparing for an IPO or major sale takes longer than many entrepreneurs expect. Regulatory requirements and buyer expectations mean you often need 2+ years of polished financial history and robust controls. Surprises or gaps in your financials can derail an IPO filing or scuttle a deal during due diligence. In short, exit readiness isn’t an overnight project – it’s a gradual process of strengthening the company’s financial foundation. Let’s dive into the key areas you should focus on, one by one.

1. Audited Financial Statements: Establish Credibility and Compliance

When planning an exit, audited financial statements are the bedrock of credibility. For an IPO, securities regulators require several years of audited financials in the prospectus – typically at least two years of audited statements are now required in Canada (recently reduced from three years to ease the burden)blg.com. Simply put, audited historical financial statements are required in order to go publicblg.com. Even in a private sale, savvy buyers will insist on seeing audited or thoroughly reviewed financials to validate the company’s performance.

Key preparation steps include: ensuring you have audits for the past 2–3 fiscal years, performed by a reputable independent accounting firm. If you’ve been using Notice-to-Reader or Review Engagement statements, now is the time to upgrade to full audits. Audit standards enforce discipline – they catch errors or aggressive accounting and provide assurance that your books fairly reflect reality. An audit report gives outside investors confidence that an impartial expert has vetted your numbers. Moreover, for an IPO, you will likely need to present financials under IFRS (International Financial Reporting Standards) rather than private enterprise GAAP (ASPE), since Canadian public companies must use IFRS. This conversion can be complex if you’ve never reported under IFRS – differences in revenue recognition, lease accounting, etc., may require restating prior periods. Starting the conversion process early (potentially with your auditors’ guidance) is crucial to avoid last-minute scrambling.

Beyond the statements themselves, audited figures will feed into many other exit documents – valuation models, prospectus disclosures, or the purchase price calculation. Audit readiness also means having solid documentation for all significant transactions, clean general ledgers, and resolved year-end adjustments. If the audit uncovers issues (e.g. revenue that was improperly recognized or expenses that were mistakenly deferred), addressing these well before you’re in front of investors is ideal.

➡️ Takeaway: Audited financial statements are non-negotiable for an IPO and highly advisable for a sale. They signal transparency and accuracy. Plan for at least two years of audited results (CSA rules as of 2025 allow two years in IPO filingsblg.com, though more history is better) and ensure you’re ready to adopt IFRS if going public. Investing in audits early on will pay off by boosting investor confidence and meeting regulatory compliance head-onblg.com.

2. Internal Controls and Governance: Building Trust in Your Numbers

Having strong internal controls and corporate governance practices is another pillar of exit readiness. Buyers and public-market investors want assurance that your company’s financial reporting is reliable and free of fraud or material error. In an IPO, you’ll eventually need to comply with internal control certification requirements (in Canada, CEO/CFO certifications under CSA rules similar to Sarbanes-Oxley). Even private acquirers will often evaluate your control environment during due diligence to gauge risk. Alarmingly, nearly 43% of companies have disclosed a material weakness in internal controls before going publicauditboard.com – a red flag that can erode valuation. To avoid joining that statistic, proactive strengthening of controls is essential.

What to focus on: Begin by documenting and improving key financial processes – for example, how revenues are recorded, how expenses are approved, how inventory is counted, etc. Implement segregation of duties (no single person should control a transaction from start to finish without oversight). Ensure proper reconciliations of accounts are done regularly. If you’re planning an IPO, it’s wise to start “SOX-lite” preparations 12–24 months in advance – many experts recommend beginning formal internal control compliance efforts up to two years before the IPO dateauditboard.com. This lead time lets you identify and remediate any weaknesses. You might even consider engaging an internal auditor or a SOX consultant to perform a pre-IPO controls review.

Good corporate governance goes hand-in-hand with controls. Well before an IPO, companies often start behaving like a public company – establishing an independent board or advisory board, forming an audit committee (with a mandate to oversee financial reporting), and creating policies for ethics and whistleblowing. Governance measures not only make you look more attractive to investors, they also help catch problems internally before regulators or buyers do. For example, having an independent director or advisor review the financials quarterly can surface issues that management missed. In Quebec and Canada, corporate law already requires directors to ensure annual financial statements are prepared and presented to shareholders, but as you approach an exit, the scrutiny should be ramped upmackisen.commackisen.com.

It’s also worth reviewing your IT systems – are your accounting and ERP systems producing reliable data? Do you have proper backups and audit trails? Modernizing systems or implementing stronger access controls now can prevent headaches during the intense due diligence of an IPO or sale.

➡️ Takeaway: Robust internal controls and governance inspire trust and reduce risk. Begin institutionalizing a public-company level control environment at least a year (if not two) before an IPOauditboard.com. This includes tightening financial processes, addressing any known control gaps, and possibly assembling a more formal governance structure (like an audit committee with independent oversight). The payoff is twofold: you’ll minimize the chance of a financial reporting surprise during due diligence, and you’ll make a positive impression on investors who are vetting your company’s reliability.

3. Tax Planning and Compliance: No Skeletons in the Closet

Taxes can make or break the economics of a sale, and tax issues can derail deals if not addressed proactively. Canadian SMEs must consider both federal and provincial tax obligations – and in Quebec, that means dealing with Revenu Québec (RQ) in addition to the Canada Revenue Agency (CRA). All it takes is one unresolved tax audit or liability to spook a buyer or stall an IPO prospectus. Thus, a critical part of exit planning is to get your tax affairs in perfect order and optimize your tax position well in advance.

Start with compliance: Ensure all tax returns have been filed (corporate income tax, GST/HST, QST, payroll remittances, etc.) and that any amounts owing are paid. Any outstanding balances or arrears should be resolved, or at least disclosed and provisioned for. Remember that in a share sale, the buyer inherits the corporation’s liabilities, including tax debts – in a share purchase “all of the target’s assets and liabilities remain with the company,” meaning the buyer will inherit any unpaid taxes or compliance issues mackisen.com. Buyers will perform tax due diligence to find unremitted GST/QST or payroll withholdings, unfiled returns, aggressive tax positions, and so on. If they find problems, they may demand that you settle them before closing or they will lower the price / hold back funds as protection mackisen.com. It’s far better for you to find and fix any tax skeletons yourself ahead of time, rather than having to scramble during a deal.

Plan for tax efficiency: On the flip side, early tax planning can significantly increase your net proceeds from a sale. Many of the best tax strategies require action years in advance. For example, Canada’s Lifetime Capital Gains Exemption (LCGE) can allow roughly $1 million of tax-free capital gains on the sale of qualified small business corporation shares – but only if very specific tests are met. One major criterion is a 24-month holding period for the shares to qualify as QSBC shares prasadcpa.com. This means if you want to use the LCGE, you need to have structured your company’s ownership and “purified” its assets at least two years before the sale. Purification might involve removing excess cash or investments from the company so that it meets the Canada Revenue Agency’s active business asset thresholds for QSBC status prasadcpa.com. These are not last-minute fixes; they require deliberate actions well ahead of time (often via reorganizations or dividends to clear out non-business assets).

Other tax planning areas include: deciding on a share sale vs. asset sale (buyers often prefer asset purchases for tax reasons, while sellers prefer share sales for a cleaner tax result prasadcpa.com), setting up family trusts or holding companies to multiply exemptions or defer tax, and meeting any provincial incentives requirements. For instance, Quebec has various investment and R&D tax credits – if you’ve claimed these, ensure you met all conditions, otherwise RQ could claw them back during an auditmackisen.com. It’s wise to obtain a professional tax due diligence review or “health check” before going to market: have tax advisors review your last several years of filings for any exposures, and apply for any available clearance certificates. Revenu Québec administers Quebec tax laws and wields broad audit powersnortonrosefulbright.com, so being on their good side (e.g. up-to-date on filings, no major disputes) is important. If your company operates in multiple provinces or countries, be mindful of any interjurisdictional tax issues (like transfer pricing or provincial income allocations) that could raise flags.

➡️ Takeaway: Tax planning for an exit should begin years in advance – the sooner the better. Early action is needed to qualify for major tax breaks (like the 24-month holding period for the LCGE)prasadcpa.com and to implement restructurings or family trusts that maximize after-tax proceeds. Equally importantly, thorough tax compliance (federal and Quebec) must be ensured: no unfiled returns, no unpaid taxes, and a strategy to resolve any audits or disputes pre-emptively. By entering the exit process with a “clean bill of health” from CRA and Revenu Québecmackisen.com, you prevent last-minute deal breakers and protect the value you’ll ultimately receive.

4. Due Diligence Preparation: Ready for the Closest Scrutiny

Due diligence is the intensive investigation that a buyer or underwriters will perform on your business’s records and operations. Rather than dreading this process, you can turn it into a strength by being fully prepared and even conducting some self-due-diligence beforehand. The goal is to present a clean, well-organized company with no big surprises lurking in the data room.

Start by organizing your documentation. Well ahead of an IPO or sale process, compile a comprehensive data room (even if just internally at first). This should include at minimum:

• Financial documents: Last 3+ years of financial statements (audited, if available), interim statements, general ledger details, budgets, forecasts, and any financial analysis.

• Tax and legal: All tax returns filed (with notices of assessment), any correspondence with CRA/RQ, documentation of any tax credits; key legal documents like articles of incorporation, minute books, shareholder registers, major contracts, loan agreements, leases, intellectual property registrations, and any ongoing litigation files.

• Operational records: Customer and supplier contracts, sales pipeline data, inventory reports, HR records (organizational chart, key employee contracts, option plans), and any regulatory licenses or permits.

Having these materials indexed and readily accessible not only speeds up the due diligence process, it signals professionalism. If a buyer’s diligence request is answered in hours with a neat folder of documents, they gain confidence that the business is well-managed. Conversely, if you scramble for weeks to find basic files, it raises doubts.

Next, perform an internal due diligence audit to spot and fix any red flags before outsiders find them. For example, review your financial statements with a critical eye: Are there any inconsistencies or odd items? A common analysis buyers do is a Quality of Earnings (QoE) review – which goes beyond the surface profit number to assess how real and sustainable the earnings are. They will adjust for one-time events or aggressive accounting tacticsmackisen.com. You can pre-empt this by identifying any non-recurring income or expenses and having explanations or adjustments ready. Ensure your revenue is bona fide (earned in the proper period, not overly concentrated in one customer, etc.)mackisen.com and that your expense base is normalized (e.g. if you, as an owner, run personal expenses through the company, be ready to point those out and remove them from profit calculations). By doing a QoE analysis on yourself, you essentially see what a buyer would see, and you can take steps to clean up the financial story (perhaps by ceasing certain aggressive practices or by preparing valid justifications for necessary one-time costs).

Likewise, do a legal due diligence check: Are all your material contracts signed and up to date? Any undisclosed liabilities or pending legal threats? Make sure any customer or vendor contracts that might worry a buyer (like those with change-of-control clauses or unfavorable terms) are addressed or at least noted. If you find, for instance, that a major client contract would allow the client to terminate if you sell the company, you might negotiate an amendment before you’re in sale talks.

Be prepared for the tough questions. Buyers will ask about everything from why margins dipped last year to how you price your products to what happens if a key employee leaves. As part of your preparation, brainstorm a list of potential diligence questions or areas of concern, and formulate clear, honest answers. If an IPO is your route, underwriters and their lawyers will perform due diligence to ensure all material facts are disclosed in the prospectus – you must be ready to disclose things like major customer dependencies, legal disputes, environmental issues, etc. It’s better to address these proactively (and mitigate them if possible) rather than hoping no one notices.

Lastly, consider confidentiality and regulatory issues: when assembling your data for a sale, ensure you’re not violating privacy laws (e.g., personal employee or customer data may need redaction or special handling in a data room under privacy regulations). And for an IPO, remember that once you file a preliminary prospectus, everything in it becomes public – so vet carefully what you include.

➡️ Takeaway: Thorough due diligence preparation can significantly smooth your exit process and even enhance value. By organizing a complete data room and conducting your own mini due diligence audit, you identify and fix weaknesses on your terms. Clean contracts, verified financials, and full disclosure of issues (with mitigation plans) will make buyers or investors comfortable moving forward. You never want a buyer to discover a problem you didn’t know about; find it first and either resolve it or be transparent and prepared to discuss it. The result is a faster due diligence phase and a stronger negotiating position, because you’ve shown the buyer there’s nothing to hide and no nasty surprisesmackisen.com.

5. Financial Forecasting and Modeling: Crafting a Credible Growth Story

While historical financials show where you’ve been, forward-looking forecasts tell buyers and investors where you’re headed – and this is often what truly drives valuation. A company preparing for exit should develop robust, realistic financial projections that instill confidence in the future performance. In fact, for any financing or sale, realistic, well-documented projections aren’t just paperwork – they’re your ticket to financing (or a premium valuation)mackisen.com.

For an IPO, you typically won’t publish explicit earnings forecasts in the prospectus (due to liability concerns), but management will discuss growth expectations in marketing roadshows and the narrative in your filings should align with a credible growth trajectory. For a private sale, most buyers will request a detailed financial model or at least multi-year forecasts during due diligence to help them price the deal. Either way, you need to have done the homework on what your next 2–5 years might look like, and be able to defend those assumptions.

Steps to prepare a solid forecast:

• Build a 3-statement financial model (income statement, balance sheet, cash flow) projecting at least 2-3 years out. Ensure the model is integrated (changes in working capital affect cash, etc.) and driver-based – meaning your revenue is driven by clear assumptions (e.g. number of units sold * price, or new customer acquisitions * average spend, etc.), and expenses are tied to logical drivers (headcount growth, cost of goods as percentage of sales, etc.). This makes it easier to justify and adjust assumptions.

• Be realistic and evidence-based. It’s tempting to paint an overly rosy picture to impress buyers, but sophisticated investors will quickly sense if projections are fantasy. Examine your historical growth rates and industry benchmarks. If you’re forecasting an acceleration in growth or margin, be ready to explain why (e.g. new product launch, economies of scale kicking in, etc.). Conversely, if growth is modest, it’s better to be honest than to oversell – you can always discuss upside scenarios, but maintain a credible base case.

• Incorporate different scenarios. Especially for an IPO, investors will consider best-case and worst-case scenarios. Prepare a base case, an optimistic case, and a conservative case. Highlight key sensitivities: for instance, “If our growth is 2% lower than base case, revenue in year 3 would be X instead of Y.” This shows that management understands the range of outcomes and has contingency plans. Scenario analysis can also be reassuring to buyers – it demonstrates you’ve thought about risks (like a downturn or loss of a big client) and how the company would cope.

• Address working capital and cash flow in the forecast. Growing revenue is great, but can you finance that growth? Model your cash needs, particularly if you’re going public to raise capital. Show when you might need to draw on a credit line or raise equity. A buyer will be interested in how much cash they might have to inject post-acquisition for growth or to cover any short-term shortfalls.

• Prepare a clear narrative to accompany the numbers. The projections alone don’t tell the story; you need a narrative explaining the growth drivers: “We plan to expand into X new markets, launching X new stores next year which drive the uptick in revenue, while gross margin improves by 2% due to a shift to higher-margin products.” Tie the forecast to strategic initiatives. Also discuss key investments (capex) or hiring that are embedded in the numbers.

If possible, have your CFO or financial advisor do a sanity check or even bring in an external expert to review the model for holes. Often a fresh set of eyes can point out overly optimistic assumptions or missed expenses. It’s much better if your team finds and fixes these, than having an investor find them and question your competence.

Remember, your forecast will be stress-tested in Q&A sessions. Investors may ask: “What if your biggest client leaves next year? What if raw material costs surge 10%?” You should be able to refer to your scenario analysis or have quick calculations ready to show you’ve contemplated these possibilities.

➡️ Takeaway: A compelling yet credible financial forecast is vital for persuading buyers or public investors of your company’s future potential. Start building your model early and refine it continuously as new data comes in. By exit time, you want a well-thought-out projection (with backup schedules and assumptions documented) that you can share confidently. It should withstand scrutiny – if challenged on any line item, you can justify it with logic or evidence. In summary, solid forecasts underpin your valuation: they give analytical support to the price you’re asking and help stakeholders see the growth story you see.

6. Working Capital Optimization: Demonstrating Financial Efficiency

Optimizing your working capital (the cash tied up in day-to-day operations like receivables, inventory, and payables) is a often overlooked but important part of exit prep. Buyers will closely examine working capital trends to ensure the business can run smoothly without unexpected cash injections post-close. In many private deals, the purchase price is adjusted based on a target working capital level agreed upon – deliver too little working capital and the price is reduced, deliver more and you might get a bump. So, managing this carefully can protect or even enhance value.

First, understand your working capital needs and patterns. Does your company have seasonal swings (perhaps you build inventory in fall for a holiday rush, or receivables stretch in certain months)? Identify what a “normal” level of working capital is for your business. Buyers often require that at closing you leave a normal amount of working capital so they can continue operations without hiccupmackisen.com. Analyze at least 12 months (if not 24) of working capital components: accounts receivable aging (any old uncollectible invoices to write off?), inventory (any slow-moving or obsolete stock that should be written down or sold off?), accounts payable (are you current with suppliers or stretching payables unsustainably?). Clean up these areas: collect aggressively on overdue receivables, liquidate excess inventory, and pay down overdue payables – but be careful not to distort things unnaturally right before a sale.

Why the caution? Because some sellers try to “window-dress” working capital in the short term (e.g. delaying payments to vendors to keep more cash on hand at closing, or slashing inventory to minimal levels). Experienced buyers will look at historical averages to prevent such tricks. If they see you suddenly shrank inventory for one month, they’ll likely normalize it in the deal calculations. In fact, thorough due diligence will highlight any unusual measures like delaying payables or aggressively collecting receivables pre-salemackisen.com. Those tactics might even backfire by disrupting supplier relationships or customer goodwill if done recklessly.

A better approach is structural working capital optimization well in advance: renegotiate supplier terms for longer payment cycles (if you lack them, start a year out, not weeks before closing), implement better inventory management systems to reduce stock-outs and overstock, and incentivize customers to pay faster (perhaps via early payment discounts) long before you’re in sale discussions. This way, improvements are real and sustainable, not just cosmetic. Demonstrating a trend of improving cash conversion cycle can actually increase buyer confidence and valuation. For example, if you show that over the last 18 months you shortened your receivables from 60 days to 45 days by implementing a new collection process, a buyer will view that positively (the business is becoming more efficient and less capital-intensive).

For an IPO, working capital is equally important – you’ll need to disclose whether you have sufficient working capital for the next 12 months in the prospectus. If not, it’s a going-concern red flag. So, you might use IPO proceeds to bolster working capital. You should be ready to explain your working capital strategy to investors: how you manage cash flow, any seasonal borrowing needs, etc.

Pro tip: Create a clear schedule of Normalized Working Capital – excluding any one-off anomalies – and be prepared to negotiate the target working capital in a sale. If you’ve optimized inventory by, say, changing your stock policy, have data to show that the new lower inventory level is sustainable and meets customer demand. Transparency here can prevent disputes at closing.

➡️ Takeaway: Working capital management reflects how well-run your business is. By optimizing receivables, inventory, and payables ahead of a transaction, you free up cash and remove potential buyer concerns. Just avoid any last-minute drastic moves that won’t hold up under scrutiny – buyers will adjust for “window dressing”mackisen.com. The aim is to enter an IPO or sale with efficient operations: you’re not leaving cash unnecessarily tied up in the business, and any improvements are genuine. A smoothly running cash conversion cycle not only avoids post-deal surprises (like a sudden cash crunch right after takeovermackisen.com), it can also enhance the price you receive by demonstrating higher effective cash flow and lower risk.

7. Local Regulatory Considerations: Navigating Canadian and Quebec Requirements

Exiting in Canada – and particularly in Quebec – means there are unique regulatory and compliance factors to address. Ignoring these can cause delays or even legal issues in your exit process. Here are the key local considerations to keep on your radar:

• Securities Regulations (CSA Rules): If you’re pursuing an IPO on a Canadian exchange, you’ll work within the CSA’s framework. Recent changes have made going public a bit easier (as noted, only two years of audited financials are required nowblg.com), but there are still extensive disclosure obligations. One big item: your financial statements in the prospectus must use acceptable accounting standards (IFRS) and be audited by a firm registered with Canadian regulators. Also be aware of rules regarding any significant acquisitions your company made in the past – you may need to include pro forma financial statements or additional audited statements of acquired businesses depending on significance. Well before filing, consult National Instrument 41-101 and related policies to ensure you’re compiling everything required. Additionally, understand the timeline: the process of preparing and getting a prospectus approved can take months, and you’ll be responding to CSA comments on your disclosures.

• Bilingual Documentation (French Translation Requirements): Quebec’s regulations mandate that if you are distributing securities in Quebec (which an IPO in Canada would), the prospectus and any incorporated documents must be in French or in French and Englishbcsc.bc.ca. In practice, that means you will need to produce a full French translation of your prospectus (or a bilingual document). This is a substantial project – prospectuses run hundreds of pages – so plan for translation early. Even for a private sale, while there’s no law requiring bilingual transaction documents if both parties agree to one language, consider the practical side: if your company’s operations and workforce are in Quebec, certain materials (employee communications about the change of control, for example) might need to be in French to comply with the province’s Charter of the French Language. It’s wise to have key documents (financial statements, management presentations, etc.) available in French if required, or be ready to translate on request. Many Quebec buyers will appreciate (or require) at least bilingual executive summaries or key schedules. In short: language matters – don’t let it be an afterthought.

• Revenu Québec and Provincial Taxes: Quebec has some distinct processes – for example, an Attestation de Revenu Québec is often needed in public contracts to prove a company is compliant with tax filings. While not strictly required for a sale or IPO, demonstrating that you have all your provincial tax ducks in a row is important. Revenu Québec can audit and assess just like CRA. Make sure you’ve addressed any Quebec-specific obligations, such as the provincial income tax return (CO-17) filing, QST registration, the unique Quebec payroll taxes (like CNESST, FNQ, etc.), and any required disclosures of aggressive tax planning transactions (Quebec has rules for disclosing certain transactions to RQ). If your business benefited from Quebec tax credits or incentives, gather the certificates and ensure compliance with their termsmackisen.com. Essentially, show that your company is as clean provincially as it is federally. Buyers/investors will often ask for representations or proof that no Quebec taxes are owing or that no attestations have been revoked.

• Local Corporate Law & Approvals: A Quebec-based company (if incorporated provincially) might need to continue under federal law or another jurisdiction if a buyer requires it (for instance, some foreign buyers prefer federal companies due to familiarity). While this isn’t a “must” in all cases, be aware of your corporate law obligations. If you go public, you’ll need to comply with Canadian securities laws on corporate governance (like National Instrument 58-101 on disclosure of governance practices, which in turn expects certain board independence, etc.). Quebec’s securities regulator (AMF) will be one of the authorities reviewing your IPO prospectus, so engaging with advisors who have experience dealing with the AMF can be helpful.

• Cultural and Stakeholder Considerations: In Quebec, doing business often involves considerations beyond just the written law – language and culture in communications, relationships with employees (think of the strong labor laws and norms), etc. For example, if a sale will eventually lead to changes in employment or require communicating with a largely French-speaking workforce, plan those communications in French to comply with Bill 101 requirements. Community and media relations for an IPO might also entail French-language press releases in Quebec. While these aren’t “financial” preparations, they are part of the broader readiness that ensures your exit is smooth. A well-prepared company will have anticipated these needs (e.g., having a bilingual CFO or spokesperson ready).

➡️ Takeaway: Local Canadian and Quebec regulations add an extra layer of complexity to exit planning – but they are navigable with forethought. Plan for bilingual documentation early (don’t scramble to translate hundreds of pages last-minute)bcsc.bc.ca. Ensure full compliance with provincial taxes and laws, so that Quebec regulators view your file as spotless. Understand the CSA’s specific requirements for IPO disclosure and factor in the needed time and standards (like IFRS audits, additional financial statements, etc.). By respecting and addressing these local considerations, you avoid regulatory delays and show potential investors/buyers that you’re fully prepared to operate in the public sphere in all required languages and jurisdictions.

8. Timeline and Team Composition: Start Early and Assemble the Right Advisors

Putting all the pieces together requires a well-thought-out timeline and a strong deal team. An IPO or major sale is a project with many parallel workstreams – financial cleanup, legal structuring, marketing, etc. Without realistic timing and experienced guides, companies can find themselves rushing at the eleventh hour, which increases the risk of mistakes.

Start early: The consensus among financial professionals is to begin exit readiness preparations 12–24 months before your target transaction dateauditboard.com. In fact, some aspects like tax structuring (QSBC shares, trusts, etc.) ideally start even earlier (3–5 years out)prasadcpa.com. If you think you might want to go public or sell in the next few years, consider yourself already on the clock. It’s far better to be ready a bit early than to try to fast-track an unprepared company. For an IPO, you might stage it like this: 18–24 months prior – hire a fractional CFO or advisor to do a readiness assessment; start audits/IFRS conversion; address any control gaps. 12 months prior – begin assembling the external team (investment bank, lawyers, auditors for the IPO if different from your normal auditors); draft the equity story and identify any last fixes needed. 6 months prior – formally kick off the IPO process, prepare the preliminary prospectus and secure any final board approvals. A similar phased timeline can apply to a private sale (with the “kickoff” being when you start approaching buyers or when you hire an M&A advisor to solicit offers).

Assemble your A-team: The deal team for an IPO will include, at minimum, investment bankers (underwriters), lawyers, and accountants/auditors, alongside your internal management (CEO, CFO)blg.comblg.com. For a private M&A sale, you’ll have an M&A advisor or investment bank, lawyers, and likely your company’s accountants heavily involved. Let’s break down roles:

• CFO/Financial Advisor: Internally, someone needs to drive the financial prep – this is often the CFO. If you don’t have one, a fractional CFO service (like Mackisen’s) can step in to quarterback this process. They’ll coordinate financial statements, forecasts, data room prep, and be the point person for answering tough financial questions from buyers or regulators. The CFO should also liaise closely with accountants and auditors to ensure all reporting is up to snuff.

• Auditors/Accountants: You’ll need auditors to complete any required audits (and possibly provide comfort letters on your financials during an IPO process)blg.com. They also often help with financial disclosures in the prospectus or sale agreements. Choose a firm with transaction experience. For instance, an IPO on the TSX will likely require an auditor that is registered with the Canadian Public Accountability Board (CPAB). Your accountants can also assist with preparing the financial sections of the prospectus or the confidential information memorandum in a sale, including translating statements into French if neededblg.com. They’ll help make sure nothing in the numbers is out of place.

• Legal Counsel: Engage a top-notch law firm with securities law (for IPO) or M&A (for sale) expertise – and preferably experience in your industry and with Quebec considerations. Counsel for your company will handle drafting of the prospectus or negotiating the sale agreement, ensuring compliance with all laws, and managing the closing mechanics. They will coordinate regulatory filings, stock exchange listing applications, and any required translations of legal documents (for example, arranging the prospectus French translation for Quebec filingblg.com). If going public, you may also have underwriters’ counsel in the mix, who will diligence your company on behalf of the investors – your counsel will work with them to address any issues.

• Underwriters / M&A Advisors: These are the deal-makers who price and structure the offering or sale. An investment bank underwriting an IPO will help decide the offer price, share structure, and will tap their network of investors to sell the issue. In a sale, an M&A advisor will identify and contact potential buyers, create the marketing materials, and help evaluate offers. Pick advisors who know your space and can access the right buyer/investor pool. They also keep the process on timeline, pushing everyone (including you) to meet deadlines.

• Other Experts: Depending on your company, you may need other advisors – e.g. a technical expert or consultant to provide a report (common in mining/resource IPOs), a valuation specialist, or a PR/Investor Relations firm to help with communications. Don’t forget about a translation firm for bilingual documents, unless your law firm handles that. And if you expect heavy tax issues, a tax lawyer might join the team to focus on those.

Coordination among this team is critical. Typically, you’ll set up a project plan with responsibilities and timelines. Weekly (or more frequent) status calls happen as you get closer to transaction execution.

Managing timeline expectations: An IPO from kickoff to listing often takes 4–6 months in execution (not counting the prep before filing)cbiz.com; a well-run private sale might take a similar length from formally going to market to closing. However, regulatory reviews (for a prospectus) or buyer negotiations can introduce delays. Build some buffer into your timeline. Also remember that markets matter – you might pause an IPO if the market conditions turn unfavorable, which could extend your timeline by months waiting for a better window.

➡️ Takeaway: Success in an IPO or sale is as much about project management as it is about the numbers. Start your readiness prep early – think in terms of years, not weeksprasadcpa.com. Line up an experienced team of professionals who’ve been through the process before: a strong CFO or financial advisor, reputable auditorsblg.com, sharp legal counsel, and bankers/advisors who know how to get deals done. With the right advisors, you’ll navigate the complex journey of an exit far more smoothly. They will help you avoid pitfalls, keep everything on schedule, and ultimately maximize the value and success of your transaction.

9. How Mackisen Helps Companies Achieve Successful Exits

Choosing the right partner to guide you through IPO or sale readiness can make all the difference. Mackisen stands out as an ideal ally for Canadian and Quebec SMEs preparing for an exit, thanks to our integrated approach to CFO, accounting, tax, and audit support. When you work with Mackisen, you’re getting a one-stop financial team that covers all bases – we ensure nothing falls through the cracks in your exit preparation. Here’s how Mackisen helps set companies up for smooth, successful exits:

• Deep Expertise and Track Record: Mackisen has been serving the Montreal business community for over 30 years (since 1991), providing comprehensive accounting and financial servicesmackisen.com. Our team of professionals includes Chartered Professional Accountants (CPAs), tax lawyers, auditors, and experienced CFOsmackisen.com. This breadth of expertise means we’ve seen it all – from cleaning up books for diligence, to navigating CRA and RQ audits, to structuring deals. We’ve helped clients navigate everything from routine CRA audits to complex cross-border transactionsmackisen.com. When it comes to exit prep, our long history means we bring proven strategies and calm guidance, even in high-pressure situations.

• Holistic Financial Services Under One Roof: Unlike a standalone consultant or a typical accounting firm, Mackisen offers integrated services covering every aspect of exit readiness. We can handle your day-to-day bookkeeping and controller needs (ensuring transactions are recorded correctly and records are immaculate), provide fractional CFO services for strategic planning and forecasting, perform audit engagements or liaison with external auditors, and coordinate complex tax planning – all within one firmmackisen.commackisen.com. This holistic approach means the left hand (tax) knows what the right hand (accounting) is doing. For example, if our tax specialists suggest a reorganization for QSBC share purification, our accounting team and CFO advisors seamlessly incorporate that into your financial model and books. You won’t have to juggle multiple vendors – we streamline the process for you.

• Quebec & Canada Regulatory Mastery: Mackisen is intimately familiar with Quebec’s unique tax and regulatory requirements in addition to federal rulesmackisen.com. We deal with Revenu Québec regularly for corporate taxes, QST, and payroll matters, as well as with the CRAmackisen.com. Planning an IPO in Quebec? We understand the AMF’s expectations and the French prospectus translation process. Private sale to an international buyer? We can help obtain necessary tax clearance certificates and ensure compliance with Quebec’s laws (like Bill 101 for employee communications). Our dual federal-provincial expertise ensures no local detail is overlooked – a crucial factor in Quebec where ignoring a provincial requirement can have serious consequences. With Mackisen as your guide, you can be confident all CSA rules, RQ issues, and bilingual documentation needs are thoroughly covered.

• Flexible, Tailored Engagements: We recognize that every company’s journey to exit is unique. Mackisen offers flexible engagement plans – from a light touch advisory to full hands-on involvement – tailored to your needsmackisen.com. Maybe you have a solid internal accounting team but need a CFO-level advisor to lead the IPO process; or perhaps you lack internal resources and need our team to roll up their sleeves across bookkeeping, reporting, and modeling. We scale our services to your situation. Our part-time CFOs can work on-site with your team in Montreal or remotely, providing support as needed – whether that’s a few hours a week or a full-time presence during crunch periodsmackisen.com. This flexibility means you get cost-effective expertise, only when and where you need it.

• Strategic Value Creation: At Mackisen, we don’t just prepare statements and tick boxes; we actively seek opportunities to enhance your company’s value ahead of an exitmackisen.com. Our CFO advisors will analyze your financials to spot improvements – maybe it’s adjusting pricing for better margins, identifying non-core expenses to cut, or leveraging government grants (SR&ED, export credits, etc.) to boost your bottom line. We advise on optimal capital structure and can even assist with business plans and pitch decks for investors. Many SME owners struggle with how to best present their company’s story – our team helps craft that narrative, backed by solid numbers. By the time we’re done, you’ll not only be compliant and organized, but also strategically stronger.

In essence, Mackisen becomes an extension of your leadership team during the exit planning processmackisen.com. We pride ourselves on being a trusted partner, not just a vendor. Our mission is to get you to the finish line of your IPO or sale with maximum value and minimal stress. From the first exploratory talks about going public or selling, through the intense preparation phase, and all the way to final closing and beyond, we stand by our clients as expert guides and problem-solvers. The results speak for themselves: our clients often tell us that after engaging Mackisen, they felt in control of the process and could approach investors or buyers with confidencemackisen.com.

➡️ Takeaway: Mackisen offers the integrated, experienced support that exit-bound companies need. By leveraging our all-in-one suite of CFO, accounting, audit, and tax services, you ensure that every financial aspect of your IPO or sale preparation is handled expertly and efficiently. We help you start early, plan smart, and execute flawlessly. When the day comes to present your company to the public markets or a potential buyer, you’ll be thoroughly prepared – and that is the greatest asset of all in achieving a successful, rewarding exit. Mackisen is ready to be your partner in this journey, bringing the expertise, dedication, and local know-how to help your business shine in its next chaptermackisen.com.