"How do I sell my business?" is one of the biggest questions you'll ever ask. Selling a small business in Sydney — one you've spent years building — is a decision most owners go through exactly once, learning as they go.
You're far from alone. Around 400,000 Australian business owners plan to retire in the next decade, representing a $3.5 trillion wealth transfer. Yet only about one in four have a formal succession plan. The result is that many viable businesses end up closing rather than changing hands.
This guide walks through the entire process from start to finish. It's written for owners of small to medium businesses in Sydney with revenues up to a few million dollars, though most of the principles apply across Australia.
Step 1: Is now the right time?
There's no perfect time to sell, but there are better and worse moments.
- Don't wait until you're forced to. 48% of Baby Boomer business owners plan to exit within five years, yet most haven't started planning. Start while the business is healthy, not when you're exhausted or health forces your hand.
- Sell when things are going well. Buyers pay for momentum. Growing revenue, healthy margins, and a stable team put you in a strong negotiating position. If you wait until the business is declining, you'll get a fraction of what it could have been worth.
- Think about your personal readiness. What will you do after the sale? Sellers who haven't thought about this often get cold feet halfway through, wasting everyone's time.
- Consider external factors. Interest rates, industry trends, and buyer appetite all affect sale prices. In 2026, Sydney's small business market remains active with strong buyer demand in essential services, education, and trades.
Step 2: Get your finances in order
This is where most sellers underestimate the work involved. Messy books are the single fastest way to kill a deal or reduce your sale price.
At a minimum, you'll need three years of profit and loss statements, balance sheets, BAS statements, and tax returns. The Australian Government's guide to selling your business has a useful overview. If your bookkeeping has been "good enough" up to now, invest in getting it cleaned up before you go to market.
Seller's Discretionary Earnings (SDE) is the metric most buyers use to value small businesses. SDE equals your net profit plus your own salary, super, personal expenses run through the business, and any one-off costs that won't recur under new ownership.
For larger businesses (roughly $1 million+ in profit), buyers tend to use EBITDA (earnings before interest, tax, depreciation, and amortisation) instead. Getting clarity on your SDE or EBITDA number is the foundation of everything that follows.
Step 3: Understand what your business is worth
For most small businesses, valuation is straightforward: multiply your SDE or EBITDA by an industry-appropriate multiple. You can get a quick estimate using the free business valuation calculator. Most small businesses sell for 2 to 4 times SDE, with the multiple driven by recurring revenue, owner dependence, customer concentration, and market conditions.
My detailed valuation guide covers the full methodology, industry multiples across six sectors, a worked example, and what specifically pushes your multiple up or down. The guide to valuation multiples by industry breaks down 18 Australian industries.
Getting a professional valuation costs $3,000 to $10,000 depending on complexity, but it gives you a defensible number. At a minimum, research comparable sales in your industry. The business.gov.au guide to valuing your business covers the basics, and Nash Advisory's multiples by industry is a useful reference.
Step 4: Decide how to sell
You have three main options.
Use a business broker. The most common path for businesses valued under $5 million. A good broker will value your business, prepare an Information Memorandum, advertise across listing platforms, screen buyers, and manage negotiations.
| Sale price | Typical commission | Upfront marketing fee |
|---|---|---|
| Under $500,000 | 8 - 12% | $2,000 - $3,000 |
| $500,000 - $1,000,000 | 8 - 10% | $3,000 - $5,000 |
| Over $1,000,000 | 5 - 8% | $3,000 - $5,000 |
Most brokers also have a minimum commission of $15,000 to $20,000. When choosing a broker, look for someone with experience in your industry and ask for references from recent sellers. BusinessForSale.com.au's guide to broker fees breaks down what to expect.
Sell directly to a known buyer. If you already know someone interested (competitor, supplier, employee, individual buyer), you can negotiate directly and save on broker fees. You'll still need a solicitor. My guide to selling to an individual buyer vs a competitor covers how different buyer types approach the purchase.
List it yourself. Platforms like Bsale, SEEK Business, and BusinessesForSale.com.au allow you to list directly. This saves on broker commissions but means you're handling enquiries, screening, and the process yourself.
Step 5: Prepare your Information Memorandum
Whether you use a broker or sell directly, you'll need an Information Memorandum (IM). This is the document serious buyers use to evaluate your business. Think of it as your business's resume. Sprintlaw's guide to Information Memorandums and Fullstack Advisory's IM guide both cover the structure in detail.
A strong IM typically includes:
- Business overview and history
- Products or services offered
- Financial performance (3 years of P&L, normalised earnings)
- Customer overview (without revealing names at this stage)
- Staff structure and key roles
- Equipment, asset list, and lease details
- Growth opportunities and reason for selling
The IM is shared only after a buyer signs a Non-Disclosure Agreement (NDA). IP Australia's free NDA builder can help you create one. Confidentiality matters. You don't want staff, customers, or competitors finding out your business is for sale before the right time.
Step 6: Go to market and screen buyers
Once your IM is ready, the business goes live. If you're using a broker, they'll list it and reach out to their buyer network. If selling directly, you'll post listings and respond to enquiries yourself.
Expect tyre-kickers. Only 20-30% of businesses listed for sale actually complete a transaction. That's not because those businesses are bad. It's because many are poorly prepared, unrealistically priced, or too dependent on the owner. If you've followed the earlier steps, you're ahead of most sellers.
Good screening questions early on save you time:
- Have they bought a business before?
- How are they funding the purchase?
- What's their timeline?
- Why are they interested in your specific business?
This phase typically takes one to six months. Businesses with clean financials, strong cash flow, and realistic pricing sell faster.
Step 7: Negotiate the deal
When a serious buyer emerges, the first formal step is usually a Letter of Intent (LOI) or Heads of Agreement. LegalVision's guide to Heads of Agreement explains what makes them binding vs non-binding. Sprintlaw's template guide covers what to include.
Key terms to negotiate:
- Purchase price and how it's structured (lump sum, instalments, or earn-out)
- What's included (assets, stock, goodwill, IP, customer contracts)
- Handover period and your involvement post-sale
- Non-compete clause (standard is 3-5 years within a geographic area)
- Conditions precedent (lease assignment, finance approval, due diligence)
How buyers typically finance acquisitions:
| Method | What it means for you |
|---|---|
| Cash | Full payment at settlement. Cleanest, fastest, lowest risk for you. |
| Bank lending | Buyer finances 50-70% through a business loan. Expect longer timelines as the lender assesses the business. |
| Vendor finance | You lend part of the price to the buyer (e.g. $150,000 of a $500,000 sale over 12-24 months). Can achieve a higher total price but you carry risk. Protect yourself with a PPSR registration. |
| Earn-out | Part of the price released when conditions are met after settlement (revenue targets, staff retention). Common when buyer and seller disagree on value. Make sure triggers, timelines, and measurement are clearly defined. |
Most real-world deals are a blend: e.g. 60% cash at settlement, 20% vendor finance, 20% earn-out. The key question for any offer: how much am I getting at settlement, and how confident am I in receiving the rest?
Step 8: Survive due diligence
Due diligence is where the buyer (and their accountant and solicitor) go through your business with a fine-tooth comb. Expect 30 to 90 days. My detailed due diligence guide covers this from the seller's perspective, including how to set up a data room and avoid common deal-killers.
What buyers will look at: detailed financials (BAS, bank statements, tax returns), customer and supplier contracts, employment agreements and leave liabilities (the Fair Work Ombudsman's transfer of business page explains what carries over), lease terms, licences, insurance, IT systems, and any legal issues.
How to make it easier: Prepare a virtual data room (an organised Google Drive or Dropbox folder) before due diligence starts. The faster you respond to buyer requests, the smoother the process. Sprintlaw's due diligence checklist is written for buyers, but reading it as a seller shows you exactly what to prepare for.
The most common deal-killers are financial surprises, undisclosed liabilities, and lease problems. Be upfront about any issues early. Buyers expect imperfections; what they don't tolerate is feeling misled.
Step 9: Contract, tax, and settlement
Once due diligence is complete, the solicitors prepare the Business Sale Agreement. Both parties should have independent legal representation. Sprintlaw's legal checklist for sellers is a useful reference. Legal fees typically run $3,000 to $8,000 for a straightforward sale, or $8,000 to $15,000+ if the deal is complex (multiple entities, property, franchise, or earn-out).
Tax: Small business CGT concessions can significantly reduce or eliminate the tax on your sale. There are four concessions available:
| Concession | What it does | Key requirement |
|---|---|---|
| 15-year exemption | Gain may be fully exempt | Owned 15+ years, retiring or permanently incapacitated |
| 50% active asset reduction | Reduces gain by 50% (on top of the standard 50% CGT discount) | Asset is an "active asset" |
| Retirement exemption | Exempt up to $500,000 (lifetime limit) | Amount contributed to super if under 55 |
| Rollover | Defer the gain for 2+ years | Must acquire a replacement business asset |
To be eligible, your business must have an aggregated turnover under $2 million or net assets under $6 million. The May 2026 Federal Budget introduced broader CGT reforms that may affect some sellers.
Talk to your accountant well before settlement. The ATO's small business CGT concessions page is a starting point, and Velocity Legal's CGT concessions flowchart is a handy visual guide. Structuring the sale correctly can save tens or hundreds of thousands in tax. This is not an area for DIY.
Step 10: The handover
A good handover protects the value you've just sold. If customers leave or staff resign because the transition was handled badly, the buyer has a problem, and that problem can circle back to you through earn-out clauses or warranty claims. My detailed handover guide covers the full process.
A typical handover includes introducing the new owner to key customers and suppliers, training on systems and operations, transferring accounts and licences, handing over documentation and institutional knowledge, and being available during an agreed transition period (usually 4 to 12 weeks).
63% of business owners say they want their business to continue beyond them. A good handover is how you make that happen.
How long does the whole process take?
From first thinking about selling to settlement, expect 6 to 12 months.
| Phase | Typical timeframe |
|---|---|
| Preparation and valuation | 1 - 2 months |
| Marketing and buyer screening | 1 - 6 months |
| Negotiation and due diligence | 2 - 3 months |
| Legal and settlement | 1 month |
Businesses that are well-prepared, priced realistically, and have clean financials sell faster. Poorly prepared businesses with inflated asking prices can take over a year.
Avoid the common traps:
- Don't overprice based on emotional attachment.
- Don't neglect the business during the sale (if performance drops, the buyer will renegotiate or walk).
- Maintain confidentiality with staff.
- Get professional help (accountant, solicitor, optionally a broker).
- Plan your CGT strategy early since restructuring after the fact is often impossible.
NAB's transition checklist and Business Queensland's preparation guide are worth bookmarking alongside this guide.
What to do next
If you're thinking about selling your business in Sydney, a good first step is to get your financials in order and talk to your accountant about a preliminary valuation. From there, you can decide whether to engage a broker or explore direct sale options.