Guide for buyers

How to buy a business in Australia

Buying an established business can get you running faster than starting from scratch: customers, staff, systems and cash flow are already in place. It is also one of the biggest financial decisions most people make, so it pays to go step by step.

This guide walks through the process and where to get professional help along the way.

1. Work out what you want and what you can afford

  • Decide how hands-on you want to be: working in the business full time, semi-managed, or fully managed by staff.
  • Set a total budget: the purchase price plus stock, legal and accounting fees, stamp duty where it applies, working capital for the first few months, and a buffer.
  • Talk to your bank or a finance broker early. A finance pre-approval tells you what you can borrow and makes sellers take you seriously.

2. Shortlist businesses and read the listings closely

  • Compare like with like: profit with the owner working versus profit under management, and the price divided by profit (the multiple).
  • Look at the trend over three years, not just the latest year.
  • Note what is included in the price (equipment, vehicles, stock, website, phone numbers) and what is not.
  • Write down your questions. On Change Hands you put them straight to the owner in messages, and they can send you the paperwork behind their answers.

3. Request the figures and sign the NDA

Sellers share detailed financials only with serious buyers who agree to keep them confidential. On Change Hands you request the figures, the seller approves you, then you sign a confidentiality agreement (NDA) online.

Respect the NDA: do not contact the business's staff, customers or suppliers without the seller's permission.

4. Do your due diligence

Due diligence is checking that the business is what the seller says it is. Your accountant and lawyer should lead this. As a minimum, check:

  • Financials: three to five years of profit and loss statements, tax returns, BAS and bank statements, and whether they match each other.
  • Owner's role: how many hours the owner works and what it would cost to replace them with staff.
  • Lease: the remaining term, options to renew, rent reviews, and whether the landlord will agree to assign it to you.
  • Staff: who is staying, their entitlements (leave, long service) and which award or agreement covers them.
  • Customers and suppliers: any reliance on one big customer or supplier, and whether contracts can be transferred.
  • Assets: condition and ownership of equipment and vehicles, and any finance or security over them (search the PPSR).
  • Licences, permits and registrations the business needs, and whether they transfer to a new owner.
  • Disputes, debts, tax arrears or compliance issues.

5. Agree the price and the contract

  • Base your offer on verified profit, not the asking price. An independent valuation can help.
  • Your lawyer should prepare or review the contract of sale, including what is included, handover and training, a restraint stopping the seller competing, and any conditions (finance, lease transfer, due diligence).
  • Ask your accountant whether the sale can be GST-free as a going concern, and how the price is split between goodwill, equipment and stock.

6. Settlement and handover

  • Transfer or set up registrations (ABN, GST, business name, licences, insurance, utilities, merchant and booking systems).
  • Agree a handover period so the seller introduces you to staff, key customers and suppliers.
  • Check employee transfers are handled correctly. The Fair Work Ombudsman explains what happens to staff when a business changes owners.

Get professional advice before you sign

Use an accountant to check the figures and tax, a lawyer to review the contract and lease, and your bank or a finance broker for funding. The cost is small compared with the price of a business, and they often find problems buyers miss.

Useful resources

Find a business to buyWho to get advice fromGuide for sellers

This guide is general information only. It is not legal, financial, tax or accounting advice and does not take your circumstances into account. Get advice from qualified professionals before you buy or sell a business. Change Hands is a listing and matching platform, not a business broker.

How to buy a business in Australia: a step-by-step guide | Change Hands