How to buy a small business in Australia

Buying a small business in Australia follows a standard sequence: work out what you can afford and run, search, sign a confidentiality agreement, verify the financials independently, make a conditional offer, complete due diligence, sign a contract and settle. business.gov.au recommends examining three to five years of tax returns, BAS, balance sheets, profit and loss records and cash flow statements before you commit. Most of the risk sits in the verification, not the negotiation. Much of what you think you are buying — the lease, the licences, the business name — has to be transferred or reissued separately.

By the bizflip team · Published 2 September 2026 · Facts checked 2 September 2026 · Sources listed below

Buying a small business in Australia is a research exercise before it is a purchase. The sequence is much the same whether you buy through a broker, from a marketplace listing, or by approaching an owner directly: work out what you can afford and run, search, sign a confidentiality agreement, verify the financials, make a conditional offer, complete due diligence, sign a contract and settle.

The sequence, start to finish

business.gov.au sets the buy-side process out in six steps, and settlement follows on the end of them:

Check whether you are business ready — skills, time, capital, appetite for the hours.
Find the right business, narrowing by industry and location.
Research the business, its market and its competitors.
Value it, and consider a professional valuation of its assets and liabilities.
Conduct due diligence on the financial records, operations and legal documents.
Make an offer, negotiate, and sign a written contract that gives it legal force.
Settle — transferring the lease, licences, business name, contracts and any staff.

Every step you skip early shows up later as a price renegotiation or a deal that collapses in due diligence.

Decide what you can buy before you start looking

The questions business.gov.au puts to prospective buyers are deliberately unromantic: do you have the right skill set, how much time will the business need, are you ready for unusual hours, and do you have capital beyond the purchase price. A business that needs an owner on site six days a week is a different purchase to one with a manager in place, at the same price. Talk to a lender early too — Business Queensland's guidance is to consult your bank as early as possible, because a lender's requirements can add weeks to a settlement timetable.

Searching, and getting past the anonymised listing

Businesses are advertised on online marketplaces, through brokers (who also hold buyer databases), in trade publications, and privately through industry contacts. Most listings are anonymised: the trading name, address and detailed financials are withheld until you have identified yourself and signed a confidentiality agreement, because a seller who advertises openly risks unsettling staff, customers and suppliers before a sale is certain. That is normal practice, not a warning sign.

Business Queensland advises sellers to qualify a buyer, get a non-disclosure agreement signed, and only then release sensitive documents — so expect to be asked about your budget, your experience and how you intend to fund the purchase. What an NDA does before financials are shared covers what you are agreeing to when you sign one.

Verifying the numbers

business.gov.au is specific: independently collect and check the business's financial information, examining the past three to five years of tax returns, business activity statements, accounts receivable and payable, balance sheets, profit and loss records, cash flow statements and sales records. Business Queensland sets a similar floor — a minimum of three years of tax returns, and three years or more of profit and loss records so you see market variations rather than one good year.

Reported profit is not the number a price is built on. Small business financials usually need normalising — removing one-off costs, adjusting an owner's above- or below-market wage, stripping out private expenses — before the earnings mean anything. SDE vs EBITDA explains which earnings figure applies to an owner-operated business and which to a managed one, and how much a business is worth covers how a multiple is applied. Ask for the working, not the summary: bank statements and BAS lodgements should reconcile to the profit and loss you are shown.

Due diligence: what you are actually checking

business.gov.au lists the items to review beyond the financials:

Licences and permits — does the business hold all of them, are they current, and can they transfer to you?
Contracts and leases — will the landlord agree to transfer the lease, or will you have to negotiate a new one? Are there outstanding agreements with suppliers?
Plant, equipment and fixtures — what is owned, what condition is it in, and is it licensed?
Assets and inventory — what does the business own, including intellectual property, and is stock included in the price?
Liabilities — outstanding debts, refunds and warranties still on foot, and any debts owing on assets registered on the Personal Property Securities Register.

Do that last one yourself: the Personal Property Securities Register records security interests over business assets, so a search shows whether the equipment you think you are buying is already pledged to someone else.

Business Queensland notes due diligence can take from a week to several months, and that a due diligence period written into a signed contract is generally limited to five to ten business days. It also recommends obtaining specific warranties and indemnities from the seller before signing — covering underpaid wages, unpaid superannuation or disputes with creditors. Due diligence before buying a business goes through the checklist, and what a data room is explains how documents are shared.

What transfers, and what has to be redone in your name

A common surprise for first-time buyers is how much does not simply come across with the sale contract.

The lease — the landlord has to agree to the transfer. A short remaining term with no option to renew is a valuation issue, not a formality.
Licences and permits — some transfer, many do not and must be applied for in your name. The Australian Business Licence and Information Service (ABLIS) lists what your business type needs in your state.
The business name — the seller starts the transfer through ASIC and receives a transfer number to give you, so you can register the name to your own ABN. ASIC cancels the seller's registration within 28 days, and the transfer number is valid for four months and 28 days.
The ABN — not transferable. The seller cancels theirs, and you register your own.
Supplier and customer contracts — many need the counterparty's consent before they can be assigned, so check whether the contracts that make the business valuable can actually follow it.

If staff are coming with the business

The Fair Work Ombudsman treats a sale of business as a transfer of business where an employee starts with the new employer within three months of leaving the old one, their duties are the same or nearly the same, and there is a connection between the two employers — which includes the old employer selling business assets to the new one. Where that applies, the new employer must recognise service with the old employer for most entitlements, including sick and carer's leave, flexible working requests and parental leave.

Some entitlements sit differently. Where the buyer is not an associated entity of the seller, the buyer can choose not to recognise prior service for redundancy and annual leave — in which case the seller pays out the accrued annual leave and any redundancy. Who bears that cost is a price negotiation, and it belongs in writing before the contract is signed.

Buying the assets or buying the company

Most Australian small business sales are asset sales: you buy the goodwill, equipment, stock and contracts, and the seller keeps their company. The alternative is a share sale, where you buy the company itself — and with it, its history and its liabilities. Asset sale vs share sale in Australia sets out how the choice is made. Understand it before you offer, because the structure affects the price.

Making the offer and getting to settlement

Business Queensland describes a two-document sequence: a non-binding letter of intent setting out proposed terms and conditions such as finance or a satisfactory lease, then a legally binding letter of offer with the final price and terms, after which a purchase contract is drafted. A deposit of 10% or more of the purchase price is typically expected. The contract should also deal with what happens if the seller's financial information turns out to be inaccurate, or if the seller does not own assets they claimed. Handover is negotiable: sellers commonly stay on for three to twelve months as a paid employee. How to make an offer on a business covers what each document commits you to.

Costs beyond the purchase price

Stamp duty — state-based, with no national rule. In Queensland, transfer duty can apply to business assets including goodwill and intellectual property. If you buy shares in a company that holds land, landholder duty may apply instead: in NSW it is triggered by acquiring a significant interest in a company or unit trust with landholdings over $2 million.
Legal and accounting fees — a solicitor for the contract and lease, an accountant for the numbers. Business Queensland notes legal fees may need to be paid upfront rather than at settlement.
GST — the sale may be GST-free as the supply of a going concern, but only if the conditions are met, including a written agreement between the parties that it is one. Confirm it with your accountant rather than assuming it.
Working capital — stock, wages and supplier payments from day one, on top of the price.
Licence and registration costs in your own name, and any compliance or equipment spend the business has deferred.

Budget for these before you set your maximum offer, not after. None of this replaces advice: business.gov.au recommends working with a business adviser, and the two you will use most are a solicitor for the contract, lease and warranties, and an accountant for the earnings, tax structure and GST treatment.

To sanity-check an asking price against the business's own earnings before you commit to due diligence, bizflip's valuation calculator is free and publishes its methodology.

Sources

Every load-bearing claim in this guide, and where it comes from:

business.gov.au sets out six steps for buying an existing business: check if you are business ready, find the right business, do your research, value the business, conduct due diligence, and make an offer. It also lists the due diligence items (licences and permits, contracts and leases, agreements, plant and equipment, assets, inventory, liabilities including debts registered on the PPSR) and recommends examining the past three to five years of tax returns, BAS, receivables and payables, balance sheets, profit and loss records, cash flow statements and sales records. — business.gov.au (Australian Government)
Business Queensland recommends a minimum of three years of tax returns and three years or more of profit and loss records, notes due diligence can take from a week to several months, that a contractual due diligence period is generally limited to 5-10 business days after signing, and that buyers should obtain specific warranties and indemnities from the seller (for example covering underpaid wages or unpaid superannuation). — Business Queensland (Queensland Government)
Business Queensland describes making an offer as a non-binding letter of intent (which may be subject to a trial, finance or satisfactory lease) followed by a legally binding letter of offer containing the final price, terms and conditions, and recommends consulting a lender as early as possible about finance. — Business Queensland (Queensland Government)
Business Queensland states that a deposit of 10% or more of the purchase price is typically expected, advises sellers to qualify buyers and have them sign an NDA before releasing sensitive documents, recommends contract provisions covering inaccurate seller financial information and assets the seller does not own, notes handover arrangements of 3-12 months as a paid employee are common, and that legal fees may need to be paid upfront. — Business Queensland (Queensland Government)
A transfer of business occurs where an employee starts with the new employer within 3 months of ending their job with the old one, their duties are the same or nearly the same, and there is a connection between the employers — including where the old employer sells some or all of the business assets to the new employer. — Fair Work Ombudsman
On a transfer of business the new employer must recognise service with the old employer for most entitlements including sick and carer's leave, flexible working requests and parental leave; but where the employers are not associated entities the new employer may choose not to recognise prior service for redundancy and annual leave, in which case the old employer pays out accrued annual leave and any redundancy. — Fair Work Ombudsman
To transfer a business name, the current holder starts the transfer through ASIC and receives a transfer number to give the new owner; ASIC cancels the seller's registration within 28 days of the transfer being submitted, and the transfer number is valid for 4 months and 28 days. — Australian Securities and Investments Commission
An ABN is cancelled when a business is sold or ceases trading — the seller cancels theirs rather than transferring it. — Australian Business Register
The licences and permits a business needs depend on its activities, industry and state or territory; the Australian Business Licence and Information Service (ABLIS) identifies them by business type and location. — business.gov.au (Australian Government)
The Personal Property Securities Register records security interests over personal property, including business assets, and can be searched by organisation. — Australian Financial Security Authority (PPSR)
No GST is payable on the sale of a going concern if certain conditions are met, including a written agreement between the parties that the supply is of a going concern. — Australian Taxation Office
In Queensland, transfer duty may apply to the transfer of business assets, which include goodwill and intellectual property. — Queensland Revenue Office
In NSW, landholder duty may apply when you acquire a significant interest in a company or unit trust scheme with landholdings over $2 million. — Revenue NSW

Ready for your own number? The valuation calculator is free and ungated, and its methodology is public.