How to prepare your business for sale in Australia
Most owners think about selling when they are tired of running the business. By then, it is usually too late to fix what lowers the price. Exit readiness is a strategy, not a transaction. Here is what to work on, and when.
1. Make the business run without you
Owner dependence is the most common reason a business sells for less than the owner hoped. If clients, suppliers and staff all come to you, a buyer is really buying a job. Document how decisions are made, hand over ownership in stages and test it by stepping away. See why everything still runs through you.
2. Spread your revenue risk
When I bought my franchise in 2011, it had just lost its number one client, half of its turnover. Concentrated revenue scares buyers for exactly that reason. Aim for a client base where no single client could sink you.
3. Clean, believable numbers
Buyers and their advisers will look closely at at least the last few years of financials. Separate personal expenses, keep management reports monthly, and be able to explain every unusual movement. Your accountant should lead this.
4. Systems and people that stay
Written processes, a capable second-in-charge and key staff who are likely to stay after the sale all reduce a buyer’s risk, and risk is what discounts a price.
5. Get the right advisers early
- →Accountant: tax position, including whether small business CGT concessions may apply to you.
- →Lawyer: contracts, leases, IP and the sale agreement.
- →Business broker or adviser: valuation and finding buyers.
- →Franchisor: if you are a franchisee, transfer approval and conditions under your agreement.
This article is general information, not financial, tax or legal advice. Talk to your own advisers about your situation.
A realistic timeline
| When | Focus |
|---|---|
| 2–3 years out | Reduce owner dependence, spread revenue, tidy the numbers |
| 12–18 months out | Strengthen the team, document systems, get an indicative valuation |
| 6–12 months out | Engage advisers, prepare information for buyers |
| Sale | Negotiate, transfer and hand over |
Where coaching fits
Coaching does not replace your accountant or broker. It helps you make the business worth more before they get involved, and helps you decide what you actually want from the exit. Exit and succession readiness is part of the Elite CEO Partnership.
Frequently asked questions
How long does it take to prepare a business for sale?
Ideally two to three years. Many of the changes that lift value, such as reducing owner dependence, take time to show up in the numbers.
What makes a small business more valuable to buyers?
A business that runs without the owner, clean financials, revenue spread across many clients, documented systems and a stable team.
Can I sell a franchise the same way?
Mostly, but your franchise agreement will set conditions, and the franchisor usually has to approve the buyer. Involve them early.