How to Sell a Business in Australia: The Full Process

Most owners think selling the business is the finish line. It isn't. The price is mostly settled years before you put it on the market, decided by how the business was built. By the time a buyer is across the table, you're not really negotiating.

I watched it happen on a phone call I wasn't even running.

The seller was a CEO, and I was sitting between him and a buyer who wanted the business. Good numbers, good reputation, a strong sale on paper. Then the buyer walked through what he actually saw. The CEO was on every marketing email, the keynote at every big event, on every sales call, named on every product release. If he disappears, the buyer said, this all stops inside 30 days.

The business had people, I said. It could run without him. So the buyer asked three questions. Could anyone else sign off a payment or move money without him? Did anyone else have the authority to make a real decision on their own? And could anyone prove a single part of the business ran without him?

Nobody could. And worse, nobody knew where they'd even begin to change that.

Here's the part that stayed with me. The buyer wasn't being difficult. The rejection and the answer were the same thing. He was telling us how to fix it, and it wasn't small. Spend the next year or two changing how the business runs, so decisions don't need the owner, the team can carry it, and the whole thing holds up when he steps out. Then come back and prove it. That's not a quick tidy-up. It's rebuilding the business from the inside. But it was the most useful thing anyone said in the whole process.

The CEO couldn't hear it. He heard someone put a low number on his life's work, and he blew the relationship up rather than sit with it. The deal died. The business was fine. He was the problem, and he couldn't stand to be told so.

I'd watched a version of that many times before. Years spent around owners taking businesses to market, and the same thing surfaced again and again. The owner had built the business around themselves and called it dedication. Staff still brought every decision back to their desk. The harder they worked, the more the business needed them to. A doom loop, under a business that looked, from the outside, completely fine.

That's what nobody tells you about selling. The price isn't set by how the business performs. It's set by how much of it is you. And it's decided long before a buyer looks.

Which means your version of that phone call is already coming. You just don't know the date. The years before it are the ones that count, and you still have them.

So this guide starts three years before the others do.

What are the stages of selling a business in Australia?

Depending on who you read and who you take advice from, you'll be handed anywhere from three stages to fifteen. Plenty of them are real, and plenty add or remove value at the edges. To keep this clear, we hold it to the five that matter. Only the last of them shows up in most guides, because the people who write those guides, brokers, lawyers, accountants, only meet you there.

1. The private thought. You wonder what it's worth and what you'd do next. You tell nobody, often for a year.

2. The honest audit. You look at your business the way a buyer will. Skip it, and a stranger does it for you instead, in front of a buyer, at the worst possible time.

3. Untangling yourself. Finding everywhere the business is tied to you personally, and cutting it loose. Longest job, started latest.

4. Proving it runs. Building a record that the business works without you, over long enough that a buyer believes it. They won't take your word.

5. The formal process. Valuation, market, offers, due diligence, contract, settlement.

Stages 1 to 4 decide the price. Stage 5 just reads it out.

What do buyers check that the document checklists miss?

The checklists handle financials, leases and contracts. What they leave out is the hidden ways you're wired into the business, the ones that only show up when someone looks. Four do the most damage, and we test for all four in every business we assess.

Personal guarantees. You're personally on the hook for a lease, an equipment loan, a supplier account. These don't transfer. They get renegotiated while the buyer is deciding how much of a risk you are.

Intellectual property in your name, not the company's. The domain, the designs, the software licences, the trademark nobody ever signed across to the business. A buyer paying for goodwill wants the goodwill included.

Licences and accreditations held by you personally. Common in trades, health, construction, professional services. If the business only trades because of a certificate with your name on it, the buyer isn't buying a business. They're buying the right to reapply for one.

Supplier deals built on your relationships. The pricing you get because you've known the supplier for 15 years. It's on no balance sheet, and it can leave when you do.

Each takes a different person to unwind, and each takes months. None of it happened because you did something wrong. You were the fastest way to get everything done, and for years that worked. Which is why finding it three years out costs you nothing, and finding it mid-sale costs you plenty.

What happens to the price during due diligence?

Here's where that cost actually lands.

You've accepted an offer. Price agreed, hands shaken, the hard part behind you. Now the buyer does what any sensible buyer does: before the money moves, they check the business is everything you said. This is due diligence, and it comes as questions. A long list, often around 200 items, each wanting a document or an explanation. You answer, those answers raise new questions, and on it goes.

If the answers live in your head instead of in the business, you're the only one who can give them. Every question stops at your desk. You're running the business and feeding the buyer at once, two full-time jobs, and the business gets less of you exactly when it can least afford it.

A prepared owner is through this in a few weeks. If you're finding the answers as you go, you're in it for months.

And months is long enough to hurt you. Revenue slips. A quarter comes in light. The buyer, watching the numbers in real time, now has a reason to go back and drop the offer, or change the terms. The deal you agreed in March is not always the deal you sign in July.

Look at what just happened. The business needed you, so diligence dragged. The longer it dragged, the more it pulled you out, and the numbers slipped. Those weaker numbers gave the buyer room to lower the offer.

So the same problem cost you twice. It set a lower price at the start, because a buyer pays less for a business that depends on one person. Then it dropped the price again at the end, because the long process hurt the numbers the buyer was judging.

What does the formal process involve?

In short: valuation, an information memorandum, market under confidentiality, offers. You agree a price in principle, then the buyer runs due diligence, and only once that checks out does a contract get drawn up, with a deposit (usually 10%) paid then. The sale agreement covers the assets, the conditions, and any restraint clause stopping you competing afterwards (business.gov.au). Read that clause. It sets what you can do with the rest of your working life.

Three points carry real timing consequences. Under the Fair Work Act 2009 you must give employees written notice, or payment instead, including staff moving to the new owner (business.gov.au). Licence transfers can take up to 12 months, so they belong at the start (business.gov.au). And CGT and GST may both apply, with small business CGT concessions possibly available (ATO). Talk to your accountant before contract stage. Our upcoming guide to tax when you sell a business shows why two owners selling for the same price can keep very different amounts.

What should you do if you're 2 to 3 years out?

Run stage 2 on yourself now, while nothing's at stake. Four questions get you most of the way:

• How long could the business run properly if you were uncontactable?
• If you stepped away from winning new work, how fast does the pipeline dry up?
• Do your clients buy from the business, or from you?
• How much of what the business is worth walks out the door with you?

If those made you uncomfortable, good. That discomfort is the buyer's view of your business, arriving early enough to act on. Untangling comes first, because it has the longest lead times. Proof comes second.

Only 20 to 30% of businesses that go to market actually sell (Exit Planning Institute). Most of the rest were sellable. They weren't ready, and found out too late. You've found out early, and that's the advantage.

That's the work we walk owners through, and you can start it with a conversation. If you'd rather start alone, our upcoming guide on when to plan your exit sets out the quarter-by-quarter version.

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