Selling a business | 13 min read

The ultimate guide to selling a business

Last updated: February 13, 2024

Welcome to our comprehensive guide on selling your business—an emotional journey that extends far beyond financial transactions. We’re here to help you make sense of the intricate process of selling a business so you can make informed decisions without overwhelming you with complex technical jargon.

Whether you’re a seasoned entrepreneur or new to the game, our guide serves as your friendly compass, providing practical insights and actionable steps to navigate this journey with confidence.

From assessing your readiness and choosing strategic selling approaches to engaging professionals and navigating the emotional ups and downs, this guide will help you each step of the way.

Let’s navigate this journey together.

This guide will cover:

1. Assessing Your Readiness to Sell: Dive into selling your business: juggling emotions and finances, timing the market, and gearing up mentally, emotionally, and physically for the journey ahead.

2. Choosing How to Sell Your Business: Unpack the pros and cons of selling your business solo for cost savings and control versus partnering with a broker for better deals and reduced stress.

3. Legal and Tax Obligations: Navigate tax complexities, handling legal obligations such as due diligence and contracts, and stressing the crucial role of professional guidance for a smooth and successful transaction.

4. Preparing Your Business for Sale: Outline the key steps to your business for sale including meticulously organising the financials, commercial, and legal docs, sprucing up the appearance, and safeguarding intellectual property like a boss.

5. How to Value Your Business: Explores methods to pinpoint your business value and key factors like financial performance and growth potential, getting top-notch valuation advice from certified appraisers, financial experts, legal pros, and industry gurus.

6. Marketing Your Business For Sale: Discover the best approach to understanding buyer behaviour, how to approach due diligence, and effective marketing and networking over the average 6-9 months it takes to sell a business.

7. Negotiating the Sale: Cover the steps to a successful sale, including how to communicate and agree key terms, as well as legal and financial aspects, compliance and asset liability disclosure to ensure a smooth transaction.

8. Finalising the Sale and Transfer of Ownership: How to follow the Australian government checklist for a smooth transfer, including keeping legal, financial and employee support and transitions in check before prepping your post-sale plan.

Woman highlights papers on a white benchtop.

1. Assessing Your Readiness to Sell

Selling a business transcends mere financial considerations; it can feel like you’re parting with a piece of yourself. Before displaying the ‘for sale’ sign, reflect on what you’re really wanting from the sale and assess whether you’re emotionally and financially ready for your next chapter once the business sells (and even if it doesn’t)..

Whether your motivation is retirement, relocation, exploring new opportunities, or unforeseen circumstances like health issues, take the time to prepare mentally in order to confirm that selling is in your best interests and those of your business.

Here are some considerations to reflect on:

  • Consider the ‘Why’ before the ‘How’: Reflect on your readiness for a fresh chapter, evaluating suitability for retirement, relocation, ventures anew, or unforeseen challenges.
  • Mental and Emotional Resilience: Acknowledge that selling is a life-altering event, not just a transaction. If retirement or a new phase beckons, allow yourself the necessary adjustment period. Be honest about your emotions, and make sure you address any anxieties or uncertainties.
  • Timing is Everything: Evaluate current market conditions in tandem with life goals. Determine whether the timing is right to secure a favourable business price or if patience could yield better results.
  • Plan for Life After the Sale: Ensure financial readiness for the subsequent chapter. Scrutinise post-sale financial standings and make the required adjustments. Additionally, assess practical aspects; are you financially equipped for life post-sale?
  • Physical Business Prep: Get your business into shape. Tie up loose ends, streamline operations, and ensure pristine financial records. Think of it like dressing your business in its finest attire before the grand reveal.

By taking a holistic approach and considering emotional, financial, and physical factors, you’ll lay the foundation for a successful business transition.

Woman looking over papers attached to a clipboard.

2. Choosing How to Sell Your Business

As you consider selling your business, an important decision awaits: whether to go it alone or enlist a business broker. The right choice hinges on your resources and financial situation, with each approach offering distinct advantages and drawbacks.

Selling Your Business Independently

Choosing to sell independently provides simplicity and potential cost savings by avoiding broker commissions. However, it requires a significant investment of your time and energy. While you maintain direct control over the sales process, this approach requires organising your business documents, advertising on a business-for-sale platform, managing buyer enquiries, and overseeing finalisation with legal and financial advisors.


  • Cost savings on broker commissions.
  • Direct control over the sales process.
  • Closer involvement in negotiations with buyers.


  • Significant time commitment.
  • Limited access to a broker’s buyer network.
  • Greater responsibility for legal and financial navigation.

Selling with a Business Broker

A business broker acts as your representative, aiming to secure the best price and streamline the process. Similar to real estate agents, some brokers may charge an initial fee and around 10% commission upon a successful sale. Before choosing a broker, research their processes, fees, and track record, considering factors like industry experience, interviews, references, fee structures, and communication.


  • Expertise in securing favourable deals.
  • Access to a network of potential buyers.
  • Offloads the stress of managing the sales process.


  • Incurs broker commissions and possible upfront fees.
  • Less direct control over the sales process.
  • Dependency on the broker’s performance and market reach.

By carefully weighing these pros and cons and conducting due diligence in selecting a business broker, this can be a good option for time-poor sellers who need help navigating the sales process.

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Selling a business goes beyond finding a buyer; it involves a deep dive into tax and legal considerations. Regardless of whether you choose independent or broker-assisted selling, early consultation with trusted professionals, especially a lawyer and an accountant, is essential to preparing your business for sale, managing risks, and ensuring accurate tax assessments.

Tax Considerations

A professional accountant can guide you in optimising tax implications including capital gains tax (CGT), taking into consideration elements like the cost base, sale price, business structure, potential tax concessions, and your income in the selling year. Small businesses may be eligible for various tax concessions, such as those with an aggregated turnover of less than $2 million, and your accountant is best placed to advise on this.

Additionally, sellers should be mindful of GST and CGT when selling business assets, cancel GST registration, settle employee payments, and manage final returns, reports, and outstanding obligations.

Legal Considerations

Engaging an experienced lawyer is crucial. A legal professional can navigate complexities, offer insights into potential risks, and protect the seller’s interests. This includes overseeing due diligence, ensuring compliance with legal standards in contracts and agreements, addressing employee matters, and ensuring industry-specific regulatory compliance.

Independent sellers can also benefit from legal support in drafting documents like a letter of intent, non-disclosure agreement (NDA), and confidentiality agreements, while also overseeing record reviews before disclosure to potential buyers. Compliance with government filings related to ownership change is a legal obligation that should not be overlooked.

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4. Preparing Your Business for Sale

Preparing your business for sale is a substantial undertaking, ideally commencing a year before listing it on the market. Beyond organising paperwork, enhancing the business’s profitability and appearance can expedite the sale and potentially elevate the selling price.

1. Organise Your Documents:

  • Financial Records: Ensure well-organised financial records, from profit and loss statements to forecast financials.
  • Commercial Info: Bundle supplier accounts, registration papers, asset details, and insurance info, simplifying due diligence.
  • Operational Documents: Compile a comprehensive set covering business history, marketing materials, and categorise for clarity.
  • Legal Details: Include staff contracts, customer agreements, leases, and health and safety guidelines for a smoother review.
  • Forecasting Documents: Showcase strengths with documents on intellectual property, revenue growth, and future prospects.

2. Spruce up the Appearance:

  • Maintenance and Upkeep: Address repairs to give your business a polished appearance and ensure your physical space is clean and tidy.
  • Aesthetic Improvements: Invest in physical updates like a fresh coat of paint, updated signage, or a revamped website which is essentially your ‘shop front window’.

3. Protect What’s Yours:

  • Intellectual Property Audit: Ensure trademarks, copyrights, and patents are up-to-date and well-documented.
  • Confidentiality Measures: Implement safeguards to protect business secrets during the sale, with potential buyers signing confidentiality agreements.
  • Asset Security: Safeguard both physical and digital assets, clearly outlining asset transfer details in the sales agreement.

Investing time in these areas will appeal to buyers undertaking their due diligence, and can make the business more appealing overall which may help increase its sale value.

Hands on a table, with coffees, and paperwork.

5. How to Value Your Business

Determining your business’s value is a nuanced process, involving various methods that offer insights into different aspects of its worth. Whether you choose to value the business independently or work with a professional, you’ll need the documents compiled during the earlier ‘Preparing Your Business for Sale’ step.

Some buyers may like to conduct their own business valuation, so having this information readily available is a time-saver. Similar to house hunting, buyers analyse the market and compare business sales and trends, a practice you should also adopt.

Here are common valuation methods:

1. Marketplace Comparison: Analyse recent sales and industry trends to establish the current marketplace value by benchmarking against similar businesses.

2. Return on Investment (ROI): Use ROI as a metric to assess how effectively your business performance translates into financial returns. The methodology is: Value (selling price) = (net annual profit/ROI) x 100, or ROI = (net annual profit/selling price) x 100. A higher ROI signifies a more lucrative investment.

3. Asset and Goodwill Assessment: Evaluate tangible and intangible assets, including goodwill, which will contribute to the overall value.

4. Future Profit Projections: Estimate future profits by considering growth prospects, industry trends, and market conditions. This is especially relevant for businesses with promising potential.

5. Cost-Based Approach: Calculate the cost of building your business from scratch, factoring tangible and intangible investments.

Factors influencing business value include strong financial performance, growth prospects, industry trends, and market conditions. When seeking professional valuation advice, consider Certified Business Appraisers with industry experience, financial advisors, business brokers, and legal and accounting professionals for accurate assessments.

Check out this detailed guide of how to value a business.

Someone holds a piece of paper with post-it notes attached, reviewing it.

6. Marketing Your Business for Sale

Selling your business takes 6-9 months on average to find the right buyer. Investing time upfront to understand your business’s unique aspects can help you find prospective buyers sooner.

Some businesses naturally attract more interest, but that doesn’t mean you can’t do anything about it. You know and understand the value of your business because you’ve invested years of hard work into it. It’s how you translate this knowledge into a language that buyers will connect with that will make the difference.

If you opt for a broker, they will collaborate with you to identify the target buyer and strategically position your business. Their fee includes advertising the business and leveraging their own buyer database.

If you choose to sell independently, you will be required to determine how you position your business to prospective buyers, and craft your own advertisement on an online marketplace to find buyers.

Here are some tips to guide you:

Identifying Your Target Audience:

  • Envision your ideal buyer; are they young, seeking adventure, a family-oriented couple, or an investor looking for business expansion?

Highlight What Appeals to Your Target Buyer:

  • Address their motivations, emphasising flexibility, remote work potential, community connection, and untapped opportunities.
  • Showcase potential growth, unexplored marketing, product lines, and distribution opportunities.
  • Address ‘red flags’ and highlight benefits such as financial stability and brand presence.

Paint a Financial Picture:

  • Illustrate the financial lifestyle and security your business offers, emphasising the potential for buyers to recoup their investment.

Craft an Engaging Advertisement:

  • Ensure you provide detailed information upfront to attract serious buyers during their research phase.
  • If selling independently, optimise your business advertisement with the following:
    • Make the title and description descriptive and engaging.
    • Target the right buyer by selecting the most suitable industry.
    • Upload multiple images to provide a visual representation.
    • List a price for clarity (ads with P.O.A don’t get as many enquiries).
    • Include location details.
    • Complete all sections of the ad, leaving no information gaps.
    • Use relevant keywords so your ad appears in relevant search results.

Additional Marketing Strategies:

  • Network within industry circles to discreetly communicate your business’s availability.
  • Participate in forums, online communities, and networking events for potential referrals.
  • Display a for-sale sign for physical businesses, if appropriate.

Sensible buyers will carry out their due diligence, looking at all aspects of your business. This can be a lengthy process and in addition to analysing financials, may include site visits, observing the business in action and meeting employees, as they try to learn everything they can about your business. The more prepared you are, the easier it will be for buyers to do their due diligence and the greater chance you’ll have at making a sale.

Remember, the selling process is dynamic. As you engage with potential buyers, be open to refining your approach and updating your advertisement to align better with their preferences and expectations.

A man and a lady look over a contract document together.

7. Negotiating the Sale of Your Business

Once a potential buyer emerges, the negotiation phase becomes a pivotal stage in selling your business. Successful negotiation involves careful consideration of various factors and formalising agreements in a comprehensive contract. Key considerations in sale negotiations start with addressing due diligence concerns transparently in order to instil confidence and trust.

Successful negotiation involves open communication, flexibility, and clarity on sale terms. These include the agreed sale price, the deposit structure, settlement period, and transition details to provide clarity and security throughout the process.

You’ll need to engage your lawyer to review the contract and make sure it’s legally sound. You’ll also need your financial advisor to conduct financial due diligence to validate financial information, disclose all relevant assets and liabilities, and ensure compliance with regulations.

Smiling lady shaking hands with another person over a laptop screen.

8. Finalising the Sale and Transfer of Ownership

Congratulations on successfully identifying a buyer and navigating through negotiation intricacies!

Now, as you approach the final stages of the sale, let’s delve into the steps needed for a seamless transition. Finalising the sale process involves signing the contract, fulfilling the purchase price, and executing business transfer steps as outlined in the agreement. Utilise this Australian Government Checklist to ensure no critical steps are overlooked.

Handling employee transfers and obligations requires transparent communication with employees about the business transition. Address employee concerns in compliance with employment laws and implement supportive measures for a smooth transition.

Post-sale responsibilities and considerations include bidding farewell to the business and reflecting on your entrepreneurial journey. Initiate your post-sale plan, collaborate with legal and financial professionals to ensure ongoing compliance, and continue supporting employees during the transition to maintain morale and productivity. It’s a crucial phase that combines financial closure with thoughtful considerations for your team and the next steps in your journey.

A man shakes another mans hand across a table.


Selling a business packs a punch, demanding your time and effort. No sugar-coating here, but armed with these insights, you can confidently dive into preparing your business for sale.

Rock-Solid Preparation is Non-Negotiable: Success hinges on prep work. Get your business into shape, tidy up financial records and nail down operations. The more prepared, the smoother the sale.

Flex Expectations, Stay Tightly Organised: Selling isn’t a sprint; it’s a journey. Adjust your expectations and keep the ship tight. Organisation is your secret weapon for a successful outcome.

Pro Tip: Don’t go solo; call in the experts. Legal, financial, business gurus—they’re your winning team. Their guidance ensures a legally sound, financially optimised sale.

Diligence Delivers Dollars: Invest in due diligence—it pays off. Understand the market, prep your business. The more you hustle, the bigger the payday.

Your business sale journey is about to kick off. Soon it will be time to get ready for your next adventure.