How to sell a business in Australia: the complete guide for owners

Before anyone talks about price, decide what you actually want from a sale. Is it a clean exit to retire, a gradual step back over a year or two, or freeing up capital for something new?

Your answer shapes everything: the type of buyer, how the deal is structured and how long you'll stay involved.

Timing matters too. Selling from a position of strength, when profit is steady and you have energy for the process, nearly always produces a better outcome than selling because you're exhausted or something has forced your hand.

If you can, start planning two to three years ahead.

At a minimum you'll want an accountant who understands business sales and a solicitor who does commercial work. Many owners also involve a financial planner, because the sale proceeds usually need to fund the next chapter of their life.

You may or may not use a business broker. Brokers can market a business widely and create competition.

Others prefer a quieter direct sale. Either way, your own accountant and solicitor are essential, because the buyer's advisers act for the buyer, not for you.

Most established small businesses are valued on what they reliably earn for a new owner, adjusted for risk. Your accountant will usually start with profit, add back one-off and personal expenses, deduct a fair wage for the work you do, and then consider how predictable those earnings are.

Recurring customers, a capable team, clean records and a secure lease all support value. Heavy reliance on the owner, a few dominant customers or ageing equipment reduce it.

Get a realistic range early, so you can decide whether to sell now or spend a year strengthening the business first.

Preparation is about making the business easy to understand and easy to take over. Reconcile at least three years of financial statements, tidy your contracts and leases, list your equipment and vehicles, and check which licences belong to you, your staff or the business.

Just as important is reducing how much the business depends on you. Document how things are done, give your team real responsibility and make sure key customer relationships don't sit with you alone.

These steps lift value and make due diligence far smoother.

Buyers usually fall into a few groups: individuals wanting to own and run a business, competitors looking to grow, groups buying several businesses in an industry, and existing staff or managers. Each brings different strengths, risks and priorities, especially around your team and your brand.

Whoever you talk to, verify who they are, ask how they'll fund the purchase and share information in stages under a confidentiality agreement. Summary figures come first; customer names and staff details only once there's a written indication of terms.

Once you agree the main terms, they're usually set out in a heads of agreement or letter of offer: price, what's included, how and when payment is made, your role after the sale and the key conditions. It's normally non-binding on price but sets the framework.

The buyer then completes due diligence, checking your financials, contracts, lease, licences, staff arrangements and equipment. Being organised and upfront here is the single biggest thing you can do to keep a deal on track.

Surprises found late are what usually kill sales.

Your solicitor prepares or reviews the sale contract. Each state has commonly used standard forms, such as the REIQ business sale contract in Queensland and the Law Society and REINSW contract in New South Wales, with special conditions added for your deal.

Common conditions include buyer finance, due diligence and the landlord's consent to transfer the lease.

On tax, ask your accountant early about the small business capital gains tax concessions, which can substantially reduce or even remove tax for eligible owners, especially those aged 55 or over who have owned the business for 15 years. The sale of a business as a going concern can also be GST-free when the conditions are met.

The buyer's solicitor will usually search the Personal Property Securities Register, so any finance over business assets needs to be cleared at completion.

At completion, payment is made as agreed and ownership changes. Under the Fair Work rules on transfer of business, staff who move to the new owner keep most of their entitlements.

Annual leave either carries across or, if the buyer chooses not to recognise prior service, must be paid out by you.

Then comes the handover. You'll typically introduce the new owner to staff, customers and suppliers and pass on what you know, for a period agreed in the contract.

Finally, your accountant helps you lodge final returns, including your last BAS, and wind up anything left in your old structure.