Buying an established business can be a faster way to enter business ownership than starting from scratch. You may inherit revenue, customers, staff, equipment, supplier relationships and a trading history. But it also comes with risk. The wrong purchase can leave you with hidden liabilities, overstated profits, poor systems or a business that depends too heavily on the current owner.
This guide explains how to buy a business in Australia in 2026, from deciding what type of business suits you through to due diligence, finance, contracts, settlement and your first 90 days as the new owner.
It is written for buyers nationally, whether you are looking at a café, takeaway shop, service business, retail store, franchise, online business or another small-to-medium business. It is general information only, not legal, tax or financial advice. Before signing anything, work with a solicitor, accountant and finance professional who understands business acquisitions.
Start your search by browsing businesses for sale on Exity.
1. Decide what type and size of business suits you
The first step in learning how to buy a business in Australia is not looking at listings. It is understanding what you are actually suited to buy.
A business that looks attractive on paper may be a poor fit if it requires skills, hours, capital or risk tolerance you do not have. Before speaking to sellers, be honest about your goals and constraints.
Consider:
· How much capital you can invest upfront
· How much working capital you need after settlement
· Whether you want to work in the business full-time
· Your experience in the industry
· Whether you prefer a simple owner-operator business or a managed business
· Your tolerance for staff, leases, suppliers and compliance
· Whether you want stable income, growth potential or a turnaround opportunity
For example, a café may suit a hands-on operator who understands hospitality, rosters, food costs and customer service. A managed service business may suit a buyer with leadership and sales skills. A small e-commerce business may suit someone comfortable with digital marketing, logistics and supplier management.
When buying a small business, do not only ask, “Can I afford the price?” Ask, “Can I run this business better than the current owner, or at least maintain its performance?”
A useful starting point is to write a simple acquisition profile:
|
Buyer question |
Example answer |
|
Preferred industry |
Hospitality, services, online, trades, retail |
|
Target price range |
$150,000 to $500,000 |
|
Owner involvement |
Full-time, part-time, fully managed |
|
Location |
Local, regional, national, remote |
|
Risk level |
Stable cash flow, growth opportunity, turnaround |
|
Required return |
Target owner income or return on capital |
This profile will help you filter opportunities quickly and avoid wasting time on businesses that do not match your goals.
2. Where to find businesses for sale: marketplaces vs brokers vs private
Once you know what you want, the next step is finding quality opportunities. Buyers usually find businesses through three main channels: online marketplaces, business brokers and private networks.
Online marketplaces are often the most efficient starting point. They allow you to compare listings by industry, location, price, revenue and business type. A marketplace like Exity’s Browse page gives buyers a central place to search and compare opportunities before contacting sellers.
Business brokers can also be useful, especially for larger or more complex acquisitions. A broker may provide information packs, coordinate communication and help manage negotiation. However, remember that the broker usually represents the seller, not the buyer. You still need your own independent advice.
Private deals can come through industry contacts, family, friends, accountants, suppliers or direct approaches to business owners. These deals may have less competition, but they can also be harder to assess because there may be no structured listing, no prepared documents and no clear process.
Each channel has advantages:
|
Channel |
Advantages |
Watch-outs |
|
Online marketplace |
Easy to compare listings, broad search, direct discovery |
Listings still need verification |
|
Broker |
Structured process, information packs, negotiation support |
Broker usually acts for seller |
|
Private deal |
Less competition, potential for direct negotiation |
May lack preparation and transparency |
If your goal is to buy a business in Australia with confidence, use more than one channel. Browse online, speak to advisers, monitor your target industry and build relationships with people who may know of upcoming sales.
3. How to shortlist and compare listings
Not every business for sale deserves serious investigation. Good buyers learn to shortlist quickly before spending money on legal, accounting or due diligence advice.
When comparing listings, look beyond the asking price. A cheaper business is not always better, and a higher-priced business may still be good value if the earnings are reliable and transferable.
Compare listings by:
· Revenue and profit trend over the last three years
· Owner’s role and weekly hours
· Lease length and rent terms
· Staff structure and key-person dependence
· Customer concentration
· Supplier reliance
· Plant, equipment and stock included
· Online reviews and reputation
· Reason for sale
· Growth opportunities
· Risks or obvious red flags
A business with stable profit, documented systems, a secure lease and a team that can operate without the owner may be worth more than a similar business where the owner does everything personally.
Ask the seller or broker for a basic information memorandum, profit and loss statements, lease summary and details of what is included in the sale. At this stage, you are not doing full due diligence yet. You are deciding whether the business is worth deeper investigation.
Use a simple scoring system. Rate each business from 1 to 5 across financial performance, owner reliance, lease quality, growth potential, operational complexity and deal risk. This helps remove emotion from the process.
4. Understanding the financials: SDE, EBITDA, add-backs and owner reliance
Financials are where many buyers make mistakes. The seller may talk about turnover, but turnover does not pay your loan, wages or personal income. Profit and cash flow matter more.
For small businesses, you will often see earnings described as SDE or adjusted profit.
SDE, or seller’s discretionary earnings, is a common measure for owner-operated businesses. It usually starts with business profit and adds back certain owner benefits, one-off costs or discretionary expenses.
EBITDA means earnings before interest, tax, depreciation and amortisation. It is more common for larger or more structured businesses.
Add-backs may include items such as:
· Owner’s salary or drawings
· Personal motor vehicle expenses
· One-off legal or repair costs
· Non-recurring consultancy fees
· Family wages above market value
· Discretionary travel or entertainment
Add-backs are not automatically valid. Your accountant should check whether each add-back is reasonable, documented and genuinely non-recurring. If an expense will continue after you buy the business, it should not be added back.
Owner reliance is also critical. A business may show strong profit because the owner works 60 hours a week, handles sales, manages staff, negotiates suppliers and maintains customer relationships. If you cannot replace that contribution, the profit may not transfer to you.
Ask:
· What does the owner do each week?
· Would customers stay if the owner left?
· Are staff capable of running daily operations?
· Are systems documented?
· Would you need to hire a manager after settlement?
· Is the owner’s wage properly reflected in the numbers?
A business is more valuable when earnings are consistent, well-documented and not overly dependent on one person.
For a deeper valuation starting point, explore Exity’s business valuation tool.
5. Asset sale vs share sale and why it matters
One of the most important structural questions is whether you are buying assets or shares.
In an asset sale, the buyer purchases selected business assets such as equipment, stock, goodwill, intellectual property, customer records, contracts and sometimes the business name. The company or legal entity that owned the business usually stays with the seller.
In a share sale, the buyer purchases the shares in the company that owns the business. This means the buyer takes control of the company itself, including its assets, contracts and potential liabilities.
For many small business transactions in Australia, asset sales are common because they allow the buyer to choose which assets and obligations they take on. However, some deals may require or favour a share sale, especially where important contracts, licences or structures are tied to the company.
The structure affects:
· Tax treatment
· GST treatment
· Employee transfer
· Existing liabilities
· Contract assignment
· Lease transfer
· Licences and permits
· Business name transfer
· Due diligence scope
For example, if you buy shares, you may inherit historical tax, employee, legal or supplier issues inside the company. That usually means due diligence must be more extensive.
If you buy assets, you still need to make sure the lease, licences, permits, domain names, intellectual property, supplier arrangements and business name can transfer properly.
Do not choose the structure based only on what the seller prefers. Get advice from your solicitor and accountant before making an offer.
6. Due diligence: the full checklist
Due diligence is the process of checking whether the business is really what the seller says it is. This is the stage where you answer the question: what to check when buying a business?
A strong due diligence process should cover financial, legal, operational, commercial and tax issues.
Financial due diligence
Review:
· Profit and loss statements for at least three years
· Balance sheets
· BAS statements
· Tax returns
· Bank statements
· Sales reports
· Payroll records
· Supplier invoices
· Rent and occupancy costs
· Debtors and creditors
· Stock records
· Equipment finance or leases
· Normalised earnings and add-backs
Check whether sales match bank deposits, POS reports and tax records. If the seller claims cash income that is not properly recorded, treat it carefully. You should generally value the business based on verifiable earnings.
Legal due diligence
Review:
· Lease agreement and options
· Franchise agreement, if applicable
· Supplier contracts
· Customer contracts
· Employee contracts
· Licences and permits
· Intellectual property
· Domain names and social media assets
· Equipment ownership
· Litigation or disputes
· Privacy and data obligations
· Insurance policies
Pay close attention to the lease. A profitable business can become unattractive if the lease is short, rent is too high, options are weak or landlord consent is uncertain.
Operational due diligence
Review:
· Staff roles and wages
· Rosters
· Key suppliers
· Customer concentration
· Systems and processes
· Equipment condition
· Maintenance records
· Stock quality
· Software subscriptions
· Online reviews
· Marketing channels
· Standard operating procedures
Ask yourself whether the business can operate smoothly during and after the ownership change.
Commercial due diligence
Review:
· Local competition
· Industry trends
· Customer demand
· Pricing power
· Growth opportunities
· Risks from new entrants
· Seasonality
· Dependency on one product, supplier or customer
A good business is not only profitable today. It should have a reasonable chance of remaining profitable after you buy it.
7. Valuation and making an offer: Heads of Agreement
Valuation is part maths and part judgement. Common methods include earnings multiples, asset value, return on investment and market comparison.
For a small business, the buyer usually focuses on maintainable earnings. If the business produces reliable adjusted earnings, a buyer may apply a multiple based on industry, risk, size, growth, systems, owner reliance and market demand.
Factors that may increase value include:
· Consistent profit
· Strong lease
· Low owner reliance
· Experienced staff
· Clean records
· Growth potential
· Good reputation
· Transferable systems
Factors that may reduce value include:
· Declining revenue
· Poor records
· Heavy owner dependence
· Short lease
· Customer concentration
· Ageing equipment
· Unresolved disputes
· Weak margins
Once you decide the business is worth pursuing, you may make a non-binding offer through a Heads of Agreement. This document usually outlines the main commercial terms before the final contract is prepared.
A Heads of Agreement may include:
· Purchase price
· Deposit
· Assets included
· Stock treatment
· Due diligence period
· Finance condition
· Lease transfer condition
· Training and handover
· Restraint of trade
· Settlement date
· Confidentiality
· Exclusivity period
Do not treat a Heads of Agreement casually. Even when intended to be non-binding, parts of it may still have legal effect. Ask your solicitor to review it before signing.
8. Financing options: bank, vendor finance and government support
Most buyers use a combination of personal funds, bank finance, vendor finance or other funding.
Banks will usually assess:
· Your deposit
· Security available
· Business financials
· Industry risk
· Your experience
· Cash flow after debt repayments
· Lease term
· Business plan
· Credit history
You may need to provide a business plan, cash flow forecast, personal financial statement and details of the acquisition.
Vendor finance is where the seller agrees to receive part of the purchase price over time. For example, the buyer pays 70% at settlement and the remaining 30% over an agreed period. This can help bridge a funding gap and may show the seller has confidence in the business. However, the terms must be carefully documented.
You may also see references to the SME Loan Guarantee Scheme. Buyers should be careful here. The COVID-era SME Loan Guarantee Schemes closed for new loans in 2022. In 2026, check current government finance programs, grants and business support directly through official sources before relying on any scheme being available.
Buyer cost planning table
|
Cost area |
What it covers |
Buyer note |
|
Purchase price |
Main price paid for the business or assets |
Do not use all available cash on the price alone |
|
Working capital |
Cash needed for wages, rent, suppliers and operations after settlement |
Often underestimated by first-time buyers |
|
Legal and accounting |
Contract review, due diligence, tax advice and settlement support |
Budget before making an offer |
|
Stock |
Inventory purchased at valuation or agreed cost |
Confirm how stock will be counted and priced |
|
Transition and training |
Seller handover, staff communication, systems setup and marketing |
Important for protecting revenue after settlement |
|
Finance costs |
Loan fees, interest, security registration and bank charges |
Include in cash flow forecasts |
|
Lease and transfer costs |
Landlord consent, assignment costs, bond or guarantees |
Check early with the landlord |
|
Licences and permits |
Applications, transfers or renewals |
Some transfers can take time |
The safest buyers keep a buffer. Settlement is not the finish line; it is the start of operating the business.
9. Contracts and settlement
Once due diligence is complete and the offer terms are agreed, the transaction moves into contract and settlement.
Your solicitor will usually review or prepare the business sale contract. This document should clearly state what is being sold, what is excluded, what conditions must be satisfied and what happens if something goes wrong.
Key contract items include:
· Buyer and seller details
· Purchase price and deposit
· Assets included
· Stock valuation method
· Lease assignment
· Employee arrangements
· Training period
· Restraint of trade
· Warranties from the seller
· Conditions precedent
· GST treatment
· Settlement adjustments
· Handover obligations
Settlement may also involve transferring or arranging:
· Lease
· Business name
· Domain names
· Phone numbers
· Supplier accounts
· Utilities
· Software access
· Social media accounts
· Licences and permits
· Equipment ownership
· Stock
· Employee records
· Customer records where lawful
In Australia, a business name cannot simply be assumed. If ownership changes and the new owner wants to use the business name, the transfer needs to be handled through ASIC.
GST also needs advice. Some business sales may be treated as a GST-free supply of a going concern if the required conditions are met. This should be addressed in the contract, not left until settlement day.
Before settlement, prepare a handover checklist with your solicitor, accountant and the seller. The more detailed the checklist, the lower the chance of confusion.
10. The first 90 days
The first 90 days after settlement are about stability before major change.
Many new owners make the mistake of changing too much too quickly. Staff, customers and suppliers may already feel uncertain because ownership has changed. Your first job is to protect revenue, understand operations and build trust.
In the first 30 days:
· Learn daily operations
· Meet staff individually
· Speak with key suppliers
· Understand cash flow
· Monitor sales closely
· Keep customer experience consistent
· Complete any urgent compliance tasks
In days 31 to 60:
· Review pricing, margins and costs
· Identify quick operational improvements
· Confirm staff responsibilities
· Improve reporting
· Review marketing performance
· Document key processes
In days 61 to 90:
· Build a realistic growth plan
· Negotiate supplier improvements where possible
· Improve customer retention
· Test marketing campaigns
· Review staffing structure
· Compare actual results with your acquisition assumptions
The first 90 days should validate your purchase thesis. If you bought the business because you believed sales could grow, costs could improve or systems could be upgraded, start with measured changes backed by data.
FAQ: Buying a business in Australia
1. What is the first step to buying a business in Australia?
The first step is deciding what type, size and structure of business suits your budget, skills and lifestyle. Before looking at listings, define your target industry, price range, location, owner involvement and required return.
1. What should I check before buying a small business?
When buying a small business, check financial records, tax records, lease terms, staff arrangements, supplier contracts, equipment, stock, licences, customer concentration, owner reliance, legal disputes and the reason for sale. This is the core of due diligence.
2. Is it better to buy assets or shares?
It depends on the business and your risk profile. An asset sale usually lets the buyer choose specific assets and avoid some historical liabilities. A share sale transfers ownership of the company itself, which may include both assets and liabilities. Get legal and tax advice before choosing.
3. 4. How do I know if the asking price is fair?
Compare the asking price with maintainable earnings, asset value, industry multiples, lease quality, owner reliance, business risk and similar market opportunities. Do not rely only on the seller’s stated profit. Have your accountant review the numbers.
4. 5. Can I finance the purchase of a business?
Yes, buyers may use bank finance, personal funds, vendor finance or a combination. Lenders usually assess the business financials, your experience, deposit, security, cash flow and the strength of the acquisition. Always leave enough working capital after settlement.
Final thoughts
Learning how to buy a business in Australia is really about learning how to reduce risk. The right process helps you avoid emotional decisions, compare opportunities clearly, verify the numbers and structure the deal properly.
Start with your buyer profile. Search widely. Shortlist carefully. Understand the financials. Complete proper due diligence. Get advice before signing. Then manage the first 90 days with discipline.
When you are ready to compare opportunities, browse businesses for sale on Exity and use Exity’s glossary deep dives on asset sales, share sales, due diligence, Heads of Agreement and vendor finance to understand the key terms before you make an offer.
