How to sell a business without a broker in Australia

Are you about to hand a broker a slice of your life's work for a job you suspect you could do yourself?

You can sell a business without a broker in Australia. Nothing in the law requires one. The federal government's own guide to selling your business lists a broker as one option, alongside your accountant and your lawyer, not as a condition of sale.

The fee isn't really the problem. The problem is that most owners who go it alone treat the sale as a listing. They put a number on it, wait for the phone to ring and hope. That isn't selling. It's advertising.

The owners who do this well treat the sale as a project with a buyer at the end of it. If that sounds like more work than you expected, you've read it right. Most first-time sellers underestimate it the same way.

What a broker actually does for the fee

Before you cut the broker out, be clear about what you're replacing. The Queensland Government's business guide describes a broker helping with the valuation, the marketing and the negotiation, and it warns that even with a broker you may still handle parts of the sale yourself.

Strip it back and a broker sells you three things. A list of buyers. A process. And a buffer between you and the person across the table.

Selling privately means you supply all three. You can. But you have to supply them on purpose.

How to sell a business without a broker, step by step

The fix is to run the sale in order, and to do the boring parts before anyone sees a number. Price is decided late. Value is built early.

Here is the sequence I would work through. Each step is there because skipping it costs you later.

1. Decide what is in the sale. Plant and equipment, stock, the business name, intellectual property, the lease, the phone number, the customer list. Write it down. Anything left vague now becomes an argument at settlement.
2. Get the numbers buyer-ready. Three years of profit and loss, your add-backs listed and explained, and activity statements that tie back to them. The buyer's accountant will rebuild your earnings whether you help or not. Help.
3. Set a price you can defend. The government guide names three common approaches: comparing recent sales, net asset value, and return on investment. Use the one a buyer in your industry will actually use, and show your working.
4. Name your buyers before you advertise. Competitors, suppliers, a senior employee, the customer who has asked twice. The best buyer for a private sale is usually someone who already understands the business.
5. Get a confidentiality agreement signed first. No signed agreement, no financials. This one habit filters out most of the tyre-kickers.
6. Agree the key terms in writing. Price, deposit, settlement date, handover period, staff and restraint. The business.gov.au guide notes the deposit is usually ten percent.
7. Have a lawyer draft the contract. This is the one cost you should never try to save. The sale agreement is a legally binding contract, and it is where a private sale is won or lost.

The honest weakness of going private is distance, or the lack of it. When you negotiate your own sale, every objection about your business lands on you personally. Owners in that position often defend their pride instead of their price.

So decide your walk-away number before the first meeting, and write it down. A broker can find you a buyer. Only you can decide what you'll accept.

The tax and paperwork you can't skip

Selling privately doesn't change your obligations. It just means nobody else is watching the clock for you.

Capital gains tax is the big one. The ATO is clear that the CGT event happens when you enter into the contract, not when you settle. Sign in June and settle in August, and the gain belongs to the year you signed.

If you qualify, the small business CGT concessions can reduce that gain a great deal. The ATO's basic conditions start with aggregated turnover under $2 million, or net CGT assets of no more than $6 million, plus an active asset test. Then come the four concessions: the 15-year exemption, the 50% active asset reduction, the retirement exemption and the rollover.

GST is the other trap. The ATO says a sale of a going concern can be GST-free when, among other conditions, the buyer is registered for GST and you both agree in writing that it's a going concern. Forget the written agreement and you can end up arguing about GST on the whole price.

Then the transfers. Leases, licences and permits have to move to the new owner, and business.gov.au warns that licence transfers can take up to 12 months. Start early, or your settlement waits on a government form.

Talk to your own lawyer and accountant on all of this. The point here is to know the questions before you're in the room.

When selling privately works, and when it doesn't

Selling without a broker works best in one situation. You already know who your buyer is.

That might be a competitor who has asked before, a long-serving manager, a supplier who wants to move closer to the customer, or a customer who wants to own its supply. In each case, the hard part a broker charges for, finding the buyer, is already done.

It works badly when you have no list and no time. Then you're advertising to strangers, screening them yourself and negotiating with whoever turns up. That's where most of a broker's fee is earned.

And remember who you're negotiating against. A serious buyer has usually done this before. You may be doing it once. Without a buffer, your opening number meets their best negotiator head-on.

So be honest about which situation you're in. If you know the buyer, a good lawyer and accountant may be all the help you need. If you don't, the broker's list is exactly what you'd be paying for.

Why I do it this way

I work this way because I've sat on the selling side of the table, more than once. I sold a venue for about 200% above what I paid for it.

The price on a sale like that isn't made in the listing. It's made long before, in the books, the lease and the handover plan. By the time a buyer sees the business, the number has mostly been decided.

That's why I care less about whether you use a broker and more about whether you've done the work a broker can't do for you. A broker markets what you've built. They can't build it for you in the last three months.

If your business still depends on you being in the building, fix that first. I've written about why founder dependency is a valuation discount, and about the three mistakes that cost owners the most when they sell.

Do this before Friday

Take a blank page and write down five people or businesses who could realistically buy yours. Next to each name, write why they'd want it.

If you can't get to five, you need a broker or more time. If you can, you may not need either. You may just need a plan.

If you're thinking about selling, with or without a broker, book a free face-to-face consultation with me (JZ) through the booking form, and read more about how I work with owners on Exit: selling your business.