Buying a Business in Airdrie:
8 Due-Diligence Questions Before You Make an Offer

Buying a business in Airdrie is not the same as buying a property. When you buy a home, what you're buying is pretty well defined. When you buy a business, you're buying a combination of assets, relationships, obligations, and assumptions about the future — and the gap between what's advertised and what's real can be significant.

That's what due diligence is for. Not to find a reason to walk away — but to understand exactly what you're buying before you commit to it.

This article is focused on the questions that determine whether the business and the premises are a real fit for you. It does not cover business valuation, financial modeling, or tax structuring — those require an accountant, a business valuator, and a lawyer, and you'll need all three before you close any deal. What it covers is the due-diligence foundation that positions you to use those professionals effectively.

Business Sale Versus Real Estate Purchase

First, a critical distinction that affects almost everything else.

When a business is sold, the deal can be structured in two fundamentally different ways. An asset sale means you're buying specific assets of the business — equipment, inventory, customer lists, goodwill, and sometimes a leasehold interest in the premises. A share sale means you're buying the legal entity that owns the business, including all its liabilities and obligations.

The structure affects your exposure, your tax situation, the lease, and the licences. Most buyers prefer asset sales for the liability protection — you generally don't inherit unknown liabilities the way you do with shares. Most sellers prefer share sales for tax reasons. The structure is negotiable, and your lawyer and accountant need to weigh in on which structure makes sense for your situation before you go very far.

The reason this matters for the premises: in an asset sale, the lease typically needs to be formally assigned to you by the seller, with landlord consent. In a share sale, the entity stays the same and the lease may not require formal assignment — but it may trigger a "change of control" clause that still requires the landlord's approval. Either way, the lease is at the centre of any business-plus-premises purchase.

Question 1: Is the Lease Assignable — and Will the Landlord Actually Consent?

In almost every commercial lease in Alberta, assignment requires the landlord's prior written consent. The Commercial Tenancies Act provides that a landlord cannot unreasonably withhold that consent — but unreasonably has to be tested in practice, and a landlord who wants to re-lease the space at a higher rate to a new tenant has different incentives than one who simply wants a reliable occupant.

Before you go any further in a deal that involves leased premises, get the lease and read it. Specifically:

How much term is left? A business that has 14 months remaining on its lease and no option to renew is a fundamentally different proposition than one with three years remaining plus a five-year renewal option. If the lease runs out shortly after the business changes hands, you're in a vulnerable position.

What does the assignment clause say? Does the landlord's consent need to be obtained? Under what terms? Is there a personal guarantee required from you as the incoming tenant?

What are the lease economics? The rent amount, the escalation provisions, the operating cost structure — are these workable for your business plan going forward? A lease negotiated by the previous owner in a different market may or may not suit your projections.

Can you negotiate a new lease directly with the landlord rather than assume the existing one? Sometimes that's preferable, particularly if the existing terms are unfavourable or if you want to extend the term.

Your commercial lawyer should review the lease before conditions are removed — not after.

Question 2: Does the Zoning Permit Your Intended Use?

A business operating in a space doesn't mean the space is zoned for what you want to do with it. The previous owner may have operated under a discretionary use approval that was specific to them. Your intended use — even if it sounds similar — may require fresh approval from the City of Airdrie.

Confirm with the City's Planning Services directly that your intended business use is a permitted or approved use at that address. Don't rely on the seller's description of what the property allows. If your use requires a new development permit or a change of use approval, understand what that process involves and how long it takes before you commit.

This matters more than it sounds. A deal that closes on a space where your intended use isn't permitted puts you in a difficult position immediately.

Question 3: What Do the Financial Records Actually Show?

Business financials are the responsibility of your accountant to interpret, but you should understand what you're being shown and what questions to ask.

Typically, you'll want to see at minimum three years of financial statements — prepared and signed off by the seller's accountant. You want to understand the source of the revenue: Is it concentrated in a few customers, or broadly distributed? What's the trend in revenue and margins over the period? Are there seasonal patterns you need to plan for?

One specific area relevant to the real estate and premises side: what are the occupancy costs as a percentage of revenue, and are those costs sustainable at current rent levels? If the business has historically paid rent at a below-market rate that was grandfathered in, and the lease is up for renewal at market rates, the financial picture changes. That's something your accountant should stress-test.

Also ask for any outstanding accounts payable, pending lawsuits, or known regulatory issues. These don't always appear on the face of a financial statement.

Question 4: Who Owns the Equipment — and What Condition Is It In?

In many business sales, a significant portion of the value is in the equipment, fixtures, and leasehold improvements. Before you rely on that value, verify it.

Get a clear list of every item included in the sale, and confirm whether each item is owned outright or subject to financing, leasing, or a lien. Equipment that looks like it's part of the business may actually be leased from a third party or subject to a personal property security registration. A search of Alberta's Personal Property Registry (PPR) will show whether any assets have registered claims against them.

Arrange for an independent assessment of key equipment if the condition is material to the value of the deal. Machinery, kitchen equipment, specialized tools — if your ability to operate depends on them working, verify that they work before conditions come off.

Leasehold improvements are a separate question. Who paid for them, who owns them, and what happens to them at the end of the lease? In many commercial leases, improvements belong to the landlord at lease end. Understand what you're actually acquiring.

Question 5: How Concentrated Are the Customers and Suppliers?

A business where 80 percent of revenue comes from two customers is a different risk profile than one with 500 customers whose individual business is roughly equal. If one of those top-two customers leaves after ownership changes, the business's financial picture changes dramatically.

Ask for a breakdown of revenue by customer (anonymized where appropriate) and understand how the customer relationships are structured. Are they governed by contracts? What's the term of those contracts? Do any contracts have change-of-ownership clauses that allow customers to exit when the business is sold?

Revenue concentration is one of the most important risk factors in any small business acquisition. If you have questions about how to interpret what you're seeing, that's a conversation worth having with Andre and your accountant before you go further.

Question 6: What Licences and Permits Are Required — and Are They Transferable?

Some licences transfer automatically when a business changes hands. Others must be reapplied for by the new owner. And some are personal to the holder and simply can't be transferred.

Make a list of every licence, permit, certification, and approval the business operates under. For each one, confirm whether it transfers, requires an application, requires a fee, or requires the new owner to meet specific qualifications. In Airdrie and Alberta broadly, business licences, health permits, liquor licences, food service permits, and professional certifications all have different transfer rules.

A gap in a required licence or permit doesn't just create inconvenience — it can mean you legally can't operate between closing and the date your new approvals come through. Plan for that gap before it becomes your problem.

Question 7: How Dependent Is the Business on the Current Owner?

This is one of the most important questions in any small business acquisition, and one of the hardest to answer honestly.

A business that functions entirely because of the skills, relationships, and reputation of the current owner is not the same as a business that operates on documented systems, established processes, and a customer base that identifies with the brand rather than the individual.

Ask the seller directly: if you left tomorrow, what would happen? Who handles the key relationships? Who knows how things actually work? Is there an employee or management team that provides operational continuity, or does everything run through you?

The answer should shape your transition plan and your view of the deal. How much transition support you need, and what form it should take, depends on the business type, your own experience, and what gets negotiated into the deal. If you're unsure how to evaluate what you're hearing from a seller, that's worth a conversation with Andre before you commit.

Question 8: What Does Transition Look Like — and Is the Seller Committed to It?

A business sale is not complete on closing day. The knowledge transfer, staff continuity, customer introduction, supplier relationship handoff, and operational learning curve that happens in the weeks and months after closing often determines whether the acquisition succeeds.

Negotiate the transition terms before you sign. How long will the seller remain available and in what capacity? What's their obligation to introduce you to key relationships? Is there a training period? Are there earn-out provisions or seller financing arrangements that give the seller a stake in the ongoing success of the business?

Transition arrangements are the part of business acquisitions that owners most often handle too informally. Getting the specifics in writing — who, what, for how long, and on what terms — protects both sides and significantly improves the odds of a successful handoff.

The Professional Team You Need

This article covers the real estate and property dimensions of buying a business in Airdrie. But no business acquisition should proceed without the following professionals involved:

A commercial real estate lawyer. To review the lease, the purchase agreement, and the asset or share sale structure. Legal fees for a business acquisition in Alberta vary considerably depending on the deal's complexity — a straightforward small business asset purchase typically runs $5,000 to $15,000 in legal fees, with more complex deals running higher. Get a fee estimate from your lawyer before you engage.

An accountant. To review the financial statements, structure the deal tax-efficiently, and help you understand what the numbers actually mean.

A business valuator (if the deal is significant enough to warrant one). To provide an independent assessment of what the business is worth — not just what the seller is asking.

A commercial REALTOR®. To advise on the market context of the premises, the lease terms relative to current market conditions, and the real estate dimensions of the deal.

What a commercial REALTOR® can contribute specifically is the property and lease perspective: is the space right for the business, is the lease workable, and are the premises-related terms of the deal structured appropriately. That's a different lens than the business valuation or legal perspective, and it's one worth having before you move into a deal.

Note: This article provides general guidance on due-diligence questions for prospective business buyers. It does not constitute legal, accounting, tax, or business-valuation advice. All transactions should involve qualified legal, accounting, and professional advisors appropriate to the specific situation.