How Tariffs Can Positively Impact Your Business Valuation: Buy, Sell, or Hold?
Canadian small business owners woke up to newly imposed tariffs from the USA. Depending on your business model, these tariffs could affect your bottom line. While frustrating, this external factor also presents an opportunity. Whether you’re considering expansion, a strategic exit, or stabilizing your position, understanding how tariffs impact business valuation is crucial.
Your desired future is a business that either thrives through growth or secures maximum return upon sale. This guide, prepared by Gateway Business Intermediaries, will help you navigate the new tariff environment and make the best decision for your business.
Obvious Mistakes Not To Make
- Ignoring the impact of tariffs and continuing with business as usual.
- Reacting impulsively without assessing how tariffs influence market dynamics.
- Failing to position your business as a strong domestic alternative.
- Not preparing financials and operations for a potential sale or expansion.
Counterintuitive Factors To Consider
- Expanding too quickly in response to temporary demand spikes without ensuring sustainability.
- Assuming tariffs will disappear and delaying necessary adjustments.
- Cutting costs excessively instead of investing in innovation and efficiency.
- Selling too soon without maximizing the new value tariffs may bring.
Obvious Actions to Take
- Conduct a financial health check to assess your business’s position.
- Strengthen supplier and customer relationships to mitigate risks.
- Position your business as a viable alternative to U.S.-dependent firms.
- Invest in new systems, equipment, and workforce training to improve efficiency and value.
Some Less Obvious Actions / Hacks to Take to Be Successful in Selling Your Business
- Highlight your business’s appeal to buyers seeking stability amid global supply chain risks.
- Optimize your digital presence to attract international buyers seeking a reliable Canadian trade partner.
- Leverage government programs supporting businesses affected by trade policies.
- Form strategic partnerships or mergers to build resilience before selling.
Market Growth & Competitive Dynamics
Tariffs have prompted Canadians to prioritize domestic business. Consumers and businesses alike are shifting purchases toward Canadian-made products, creating stronger market demand. Provincial governments are working to ease interprovincial trade barriers, while businesses are actively promoting ‘Locally Made’ products. This shift reduces reliance on volatile global markets and increases the stability of Canadian businesses—making them more attractive to potential buyers.
Investing in your business now—by improving operations, upgrading equipment, or optimizing supply chains—enhances valuation. Increased efficiency and a stronger market position result in higher multiples when selling, making your business more appealing to buyers seeking long-term stability.
Look, we do this all the time here at Gateway Business Intermediaries. At the end of the day, it’s your business and we’re not here to tell you how to run it. What we can do is lay out all the options and provide you with the support and expertise needed to make the best choice for your circumstances. Whether you decide to buy, sell, or hold, the most important thing is making an informed decision that aligns with your goals and secures your future success.
