How to Buy a Business in Australia: A Step-by-Step Guide

We're seeing a marked increase in enquiries from buyers looking to purchase an existing business rather than start one from scratch, tradies wanting to acquire a competitor, professionals leaving corporate roles, and investors looking for cash-flowing assets. Buying a business can get you to profitability faster than starting one, but the process trips up a lot of first-time buyers who don't know what order things happen in.

Here is the process we walk clients through, from the first search to the day you take over the keys.

Step 1: Define What You're Actually Looking For

Before you look at a single listing, get specific about:

• Budget — total purchase price you can fund, including your own equity contribution (typically 20–40% of the deal).
• Industry — ideally one where you have some relevant experience, or can bring in someone who does.
• Deal size — a $500K trades business and a $10M manufacturing business are entirely different processes, timelines and lender pools.
• Involvement level — owner-operator from day one, or a business with existing management you can step back from?

Getting a clear mandate here saves months of looking at businesses that were never going to work for your situation.

Step 2: Get Your Finance Pre-Positioned

Most first-time buyers do this backwards, they find a business, fall in love with it, then try to work out how to fund it. Talk to a broker before you make an offer. At minimum you should know:

• How much debt capacity your own financial position supports.
• What equity you have available (savings, redundancy payout, equity in your home, SMSF in some structures).
• The rough range of deal size and structure that will actually get supported by lenders.

A pre-positioned buyer with an indicative finance letter moves faster than one starting from zero, which matters when a good business attracts multiple interested parties.

Step 3: Source and Screen Targets

Businesses come to market through business brokers, accountants and advisors with retiring clients, industry networks, and direct approaches to owners who haven't formally listed. Off-market opportunities, where you approach an owner directly, often come with less competition and more room to negotiate.

Screen quickly on the basics: is the revenue trend stable or growing, is the EBITDA margin sensible for the industry, is the price roughly in line with market multiples, and is there a clear reason the owner is selling (retirement and succession are healthier reasons than a business in decline).

Step 4: Sign a Letter of Intent or Heads of Agreement

Once you have a target and an agreed price in principle, a non-binding letter of intent (LOI) or heads of agreement sets out the key commercial terms, price, structure, exclusivity period, and conditions, before you both spend money on due diligence and legal work. This is also the point to start finance discussions in earnest with your broker, not after due diligence is complete.

Step 5: Due Diligence

This is where deals are made or broken. At a minimum you (or your accountant) should be verifying:

• Financial due diligence — normalised EBITDA, quality of earnings, revenue concentration, working capital trends.
• Commercial due diligence — customer contracts, supplier terms, competitive position, market outlook.
• Legal due diligence — lease terms, employee entitlements, litigation history, licences and permits.
• Operational due diligence — key-person risk, systems, equipment condition, transferability of relationships.

We cover this in detail in our due diligence checklist for buying a business.

Step 6: Finalise the Funding Structure

With due diligence findings in hand, your broker finalises the deal structure, typically a mix of senior debt, your own equity contribution, and in many transactions some vendor finance or an earn-out. Running a proper banking tender at this stage, rather than accepting the first offer from your own bank, is what usually makes the difference between an average outcome and a genuinely competitive one.

Step 7: Negotiate the Sale Agreement

Your lawyer drafts or reviews the business sale agreement, covering price and payment terms, warranties and indemnities, restraint of trade clauses on the vendor, and any handover or transition support period. This is also where earn-outs or vendor finance terms get formally documented.

Step 8: Settlement

Finance is drawn, funds move, and ownership transfers. A well-run process from LOI to settlement typically takes 6–12 weeks for an SME transaction, longer for larger or more complex deals. Build in time for lender conditions, particularly if the facility requires valuations, stock takes, or specific security registration.

Step 9: The First 100 Days

The deal isn't done when settlement happens. The businesses that transition well have a plan for staff communication, customer and supplier introductions, and a defined handover period with the outgoing owner, whether that's two weeks or six months. Build this into the sale agreement, not as an afterthought once you own the keys.

Get Your Finance Sorted Early

The single biggest lever a buyer has over the outcome of a deal is being properly finance-ready before you're negotiating under pressure. Glenclair Financial is an independent commercial finance brokerage, we run full market tenders across 60+ lenders to secure acquisition finance on the best available terms, at zero cost to you as the borrower.

If you're actively looking to buy a business, or have a target in mind, get in touch before you make an offer.