Whether you’re looking to grow through acquisition or finally cash out after years of hard work, buying or selling a business is a high-stakes move.

It can set you up for long-term success or become an expensive, exhausting mistake.

This isn’t just a financial transaction. It’s an emotional, operational, and legal journey. And if you’re not prepared, the risks can outweigh the rewards.

So, whether you’re on the buy side or planning your exit, here’s what you must know before you sign anything.

1. Know Your Numbers And Theirs

Buyers: Don’t take the seller’s numbers at face value. Dig deep into financial statements for at least the last three years. Look at:

Revenue trends (flat, growing, or declining?)
Gross and net profit margins
Operating costs
Owner’s compensation and any add-backs

Sellers: Ensure your books are clean and up-to-date. If you’ve been running personal expenses through the business, now’s the time to stop. A clear profit picture makes your business more valuable.

Tip: Use tools like BizBuySell and Business.gov.au to benchmark what similar businesses in your industry are selling for.

2. Understand Why the Business is Being Sold

Buyers need to know: Why is this business really for sale?

Is the owner retiring? Burnt out? Or is the business struggling?

Ask direct questions. Look for signs of:

Key customer loss
Industry decline
Staff turnover
Supplier issues

And cross-check their answers with data and employee feedback where possible.

Example: A client nearly bought a café with solid financials until we discovered the landlord was planning a rent hike that would kill profitability. Always check the lease.

3. Due Diligence is Non-Negotiable

Due diligence isn’t just for big corporate takeovers. It’s for every buyer who wants to sleep at night.

Areas to check:

Legal structure and contracts
Intellectual property (branding, patents, website domains)
Tax compliance and liabilities
HR records and employee agreements
Customer and supplier contracts

Use a due diligence checklist like this one from LegalVision or get a trusted advisor to guide you through the process.

Tip: Always engage a lawyer and accountant with experience in business sales. This is not a DIY job.

4. Know the Value Drivers (and Deal Killers)

Sellers: What makes your business valuable?

Reliable recurring revenue
Strong brand and market reputation
Documented systems and processes
Loyal customers and team

Buyers are looking for businesses that don’t fall apart without the owner. If everything relies on you, that’s a red flag.

Example: One owner we worked with couldn’t sell because all client relationships lived in their head. Once we systemised onboarding, automated quoting, and trained staff, the business was revalued significantly higher.

5. Watch for Hidden Risks

Buying a business isn’t just about what’s on paper. There are often risks hiding just below the surface.

Common pitfalls:

Overvalued goodwill
Undisclosed debt or legal disputes
Pending changes in regulation
Technology that’s out-of-date or unsupported
Key staff planning to leave post-sale

Buyers: Ask to speak with key employees or customers before closing. If that’s off the table, that’s a red flag.

Sellers: Transparency builds trust and gets deals done faster.

6. Transition Planning Is Critical

Buyers: You’ll need a handover plan. What does the seller’s involvement look like post-settlement? 30 days? Six months?

Sellers: Stick around just long enough to hand over knowledge but not so long you become a crutch. Set clear expectations in writing.

Tip: Agree upfront if training or transition support is included in the sale price or if it’s paid separately.

7. Financing the Deal

If you’re buying, don’t assume you’ll pay upfront in full. There are multiple ways to structure a deal:

Outright purchase
Vendor finance
Earn-out arrangements (where the seller stays involved for a period)
Investor partnerships

Each has pros and cons. Make sure the structure works for your cash flow and risk appetite.

Check Small Business Loans from NAB or ANZ Business Lending for finance options.

8. Culture and People Matter

Financials are important, but culture makes or breaks a business long term.

Buyers: Observe team dynamics. What’s the leadership style? Will the culture clash with yours?

Sellers: Start involving key staff early (if appropriate). Uncertainty kills morale. Honest communication goes a long way.

9. Marketing and Customer Retention

What’s the business’s marketing engine? How are new leads generated? What’s the retention strategy?

If the current owner has been running everything off referrals or word of mouth, you’ll need to build a marketing funnel quickly post-acquisition.

Tip: Use SEMrush or Ahrefs to audit the business’s online presence before you buy.

10. Get Expert Help

This is one of the most important business decisions you’ll ever make. You don’t need to do it alone.

Work with:

A commercial lawyer with M&A experience
An accountant or business advisor who understands valuations and financial analysis
A broker (if selling) who’s got a track record in your industry

And make sure you understand every clause in the contract – no matter how experienced your advisors are.

Final Thoughts: Buy or Sell with Eyes Wide Open

A business sale isn’t just a transaction, it’s a transformation.

Whether you’re walking into a new chapter or exiting one you’ve built from the ground up, the stakes are high.

With clear due diligence, strong advisors, and a realistic view of value and risks, you can walk away from the deal confident and well-positioned for what’s next.