How to Sell a Business Privately in Australia
The six steps, what you take on without a broker, and the part that runs long in a private sale. It is rarely the finding. It is the answering.
You can sell a business in Australia without a broker, and plenty of owners do. The steps are the same ones any sale goes through. You decide what is included in the sale, work out what it is worth, find and qualify buyers yourself, negotiate, get the contract drawn, and deal properly with your staff. Skipping the broker removes the commission and the person who would have carried most of that.
What almost nobody tells you before you start is which part takes the time.
Owners going private plan for the finding. That is the bit that looks hard from the outside, and it is the bit a broker is visibly paid for. In practice the finding is rarely what runs long. The answering is. Once a buyer is genuinely interested, the questions start, and they keep coming for weeks, and every one of them arrives while you are still running the business.
That is the part to plan for, and it is the reason some private sales drift for a year.
What selling privately involves
Decide what is included. Six things, in roughly this order, and this is the first. Not the business in the abstract. The equipment, the stock, the vehicles, the customer contracts, the intellectual property, the lease. Buyers ask early and a vague answer costs you credibility in the first conversation.
Work out what it is worth. More than one method, compared. Our guide to valuing a business covers the methods, and our guide to what buyers really pay covers the range you should expect.
Find buyers, confidentially. This is the part you are taking on. Your own network first, then suppliers, competitors and customers, then the online listing sites. Anyone who gets your numbers signs a confidentiality agreement first.
Qualify them before you spend time on them. Most enquiries are not buyers. Some are competitors having a look. Ask early what they are looking for, what they have bought before, and how they intend to fund it.
Get the contract drawn properly. This is where private sales come unstuck. Our guide to your deal team covers what the contract has to settle and why a lawyer is the one thing you do not skip.
Handle your people properly. Staff entitlements, notice and what transfers to the new owner are not optional and not something to work out at settlement.
What you take on when there is no broker
The commission saving is real. So is the work it was buying.
The screening. A broker filters twenty enquiries down to the two worth your time. Privately, all twenty reach you, and you cannot tell which is which until you have spent an hour on each.
The confidentiality. A broker markets a business without naming it. Doing that yourself, through your own network, is harder than it sounds, and word moves faster in a trade than anyone expects.
The negotiation. Selling something you built to somebody picking it apart is difficult in a way that has nothing to do with commercial skill. A broker takes that conversation away from you, which protects the deal and the relationship at the same time.
The distraction. This is the one that costs money. A sale process is a second job for the best part of a year. If the business needs you daily, the hours come out of the business, and a business that drifts during a sale gets repriced on the way through.
When private makes sense
The clearest case is when there is nobody to find: a family member. A manager or two who have raised it before. A competitor who has asked. A supplier who has wanted in for years. If the buyer already exists, you are being asked to pay a finder's fee for a job that is already done. Our upcoming guide to management buyouts covers the version where the buyer is your own team.
It also works where the business is small and simple enough to explain in an afternoon, and where you have genuine time and people who can hold things steady while your attention is elsewhere.
The part of this that is not about the method
Here is what we would want an owner to sit with before choosing either route.
Ask what makes a business easy to sell and the answer that comes back, ahead of the valuation and ahead of the marketing, is whether there is a plan for the business running without you. That is not a step at the front of a list. Every other step is measuring it.
If the business runs on you, going private and going through a broker fail in the same way. Privately, you are running the sale and being the answer to every question at once. With a broker, you have bought reach and a buffer, and you still sit through due diligence personally, because you are the only one who can. The commission never bought you out of that.
Talking to owners who went private, the thing that comes up is rarely that it went badly. It is that it took months longer than they had planned for, and the months came out of the business. The part that ran long was the answering, not the finding.
None of which makes the private route wrong. It makes the preparation the thing that decides whether either route is comfortable. Our guide to owner dependency covers what buyers do when they find a business that cannot be handed over.
Frequently asked questions
What is the easiest way to sell a business?
The one where the work was done first. The advice that ranks for this puts a transition plan for the business running without you ahead of valuation and ahead of marketing, and that matches what we see. A business a buyer can take over easily is easier to sell in every other respect, with or without a broker.
How much is a business worth to sell?
It depends on what it earns, how stable that is, and how much of it depends on you. Two businesses on identical revenue can be priced very differently. Our guide to how much you can sell for works through it from the owner's side.
How many times profit is a business worth?
There is no single multiple. It moves by industry, by size, by how clean the numbers are and by how much runs through the owner. Our guide to valuation multiples sets out the ranges and what swings a business from the bottom of one to the top.
How do I avoid capital gains tax when selling a business?
An accountant question, and worth asking early, because eligibility for the small business concessions can turn on decisions made years before the sale. Our guide to the small business CGT concessions sets out what exists.
At what point do I give up on my business?
Closing and selling answer two different questions, and owners at this point often have them tangled. One is whether the business has a future. The other is whether you can keep going. Our upcoming guide to closing or selling works through the comparison honestly, including what each path leaves behind.
Do I still need a lawyer if I sell privately?
Yes, and arguably more. The contract has to satisfy your state or territory conditions and settle what happens if the buyer walks, who deals with creditors, and who pays employee entitlements. Without a broker managing the process, that document carries more of the job of protecting you.
Sources
- business.gov.au, Sell your business
- Axial, How to sell a business quickly
Clarity Systems installs ClarityOS in owner-led businesses, so decisions, relationships and money stop running through the owner. The Independence Score is where you find out how close yours already is.
General information only. This article is general information about business operations and does not take account of your objectives, financial situation or needs. It is not financial, legal, taxation or accounting advice, and no advisory relationship is created by reading it. Clarity Systems is not a licensed financial adviser, registered tax agent or law firm. Before acting on anything in this article, obtain advice from a qualified professional who knows your circumstances. Information was accurate at the date of publication and may have changed since. To the extent permitted by law, Clarity Systems accepts no liability for any loss arising from reliance on this article. Third-party sources are cited for reference and their inclusion is not an endorsement.