How to Sell Your Business Privately: A Step-by-Step Guide

Most business owners assume selling a business means engaging a broker and handing over a slice of the sale price. It does not. Plenty of Australian businesses change hands each year through a private sale, and the process is more orderly than owners expect once it is broken into steps.

Step 1: Get your numbers in order first

Nothing kills a business sale faster than a buyer asking for three years of financials and being told they are “with the accountant”. Before you advertise, assemble profit and loss statements for the last three financial years, current balance sheet, BAS lodgements, a plant and equipment list, your lease, and any supplier or franchise agreements.

While you are at it, normalise the figures. Buyers value a business on what it earns for an owner-operator, so add back your own above-market wage, private vehicle costs and one-off expenses, and be ready to explain every adjustment.

Step 2: Price it on earnings, not on effort

Small businesses in Australia commonly trade on a multiple of adjusted net profit, with the multiple depending on how transferable the earnings are. A business that runs without the owner earns a higher multiple than one where the owner is the business. Stock and plant are usually treated separately.

Look at what comparable businesses in your industry and region are actually advertised at. It is the cheapest market research available.

Step 3: Write an advertisement that filters

A good business listing does two jobs: it attracts genuine buyers and it repels tyre-kickers. Include the industry, location (usually by region rather than exact address), years established, turnover, adjusted net profit, staffing, lease terms and reason for sale. Vagueness reads as something to hide.

Step 4: Put it where business buyers look

Business buyers search a handful of specialist sites, and those sites only accept listings from licensed agencies. As a licensed agency we lodge your listing for a once-off $1,495 and it stays live until the business sells, with no commission. The detail is on our sell my business page.

Step 5: Control the flow of information

Take enquiries yourself, but release information in stages. A short summary first, a confidentiality agreement next, then the financials. Meet serious buyers on site out of hours if staff and customers do not yet know.

Step 6: Get the contract right

This is where you spend money rather than save it. A solicitor or accountant should draft or review the contract of sale, the apportionment of goodwill, plant and stock, the restraint of trade, the lease assignment and any handover period. The advertising you can do yourself; the legal documents you should not.

See how a private business sale listing works, or call us on 1300 622 300.