17/12/2025 • 18 min read
10 Steps to a Successful Business Sale (Australia 2025)
10 Steps to a Successful Business Sale (Australia 2025)
A successful business sale in Australia is achieved by following 10 disciplined steps: clarify the sale objective, prepare credible financials, normalise earnings, resolve tax and legal risks, choose the right deal structure, set a defensible price, run a controlled sale process, manage due diligence, document the transaction correctly, and execute post-sale tax and settlement obligations. From an Australian accounting practice perspective, the difference between an “acceptable” outcome and an optimal one is usually determined by preparedness for buyer due diligence and proactive tax structuring (especially CGT concessions, GST on sale of a going concern, and employee/Division 7A issues).
What does “a successful business sale” mean in an Australian accounting context?
A successful business sale means the vendor achieves the target after-tax proceeds, completes the sale with minimal post-completion disputes, and avoids unexpected tax or compliance liabilities that erode value. Practically, accountants measure “success” by certainty: certainty of earnings, certainty of tax outcomes, and certainty of settlement.
- Deal certainty: fewer conditions precedent, faster due diligence, fewer price chips.
- Tax certainty: clear CGT outcomes, defensible GST position, correct employee and superannuation treatment.
- Cash certainty: working capital and debt-like items clearly defined to avoid settlement leakage.
Step 1: Why must you define your sale objective, timeline, and “non-negotiables” first?
You must define the objective first because it determines structure, timing, buyer type, and the tax planning window available. In practice, many “failed” sales fail at Step 1 because the vendor is not aligned on price vs speed vs risk.
- Timeline: sale within 3–6 months (limited restructure options) vs 12–24 months (more scope for clean-up and tax planning).
- Non-negotiables: staff retention, brand continuity, earn-out acceptance, vendor finance tolerance.
- After-tax target: target net proceeds, not just headline price.
Real-world scenario (common in practice): A family company expects “$3m sale price” to equal “$3m in pocket”. Once company tax, Division 7A, and extraction planning are modelled, the net personal outcome may be materially lower unless addressed early.
Step 2: How do you prepare “buyer-grade” financial statements and management reports?
You prepare buyer-grade financials by ensuring they are consistent, well-supported, and easily reconcilable to BAS/IAS and tax filings. Buyers pay for certainty; messy numbers trigger discounts.
- Reconcile accounting to lodgements:
- Clean balance sheet:
- Segment reporting (where relevant):
- Superannuation Guarantee (SG) compliance is a frequent due diligence focus because unpaid SG has serious consequences and can become a deal breaker. ATO guidance and SG rules should be considered in clean-up (and specialist advice obtained where needed).
Step 3: What is earnings “normalisation” and why does it drive sale price?
Earnings normalisation is the process of adjusting reported profit to reflect sustainable, maintainable earnings (often expressed as EBITDA) by removing one-off, non-recurring, and owner-specific items. It drives sale price because most SME deals use an earnings multiple.
- Owner remuneration: above/below market wages and super.
- Related-party expenses: rent, motor vehicles, management fees.
- One-offs: unusual legal costs, insurance claims, COVID-era subsidies, relocation costs.
- Accounting policy consistency: depreciation approaches, inventory obsolescence policies.
Practical example: If reported EBITDA is $700k but includes $150k of non-recurring legal costs and $100k of owner “discretionary” expenses, a defensible maintainable EBITDA could be closer to $950k. At a 4x multiple, that’s potentially $1.0m of value difference—if properly evidenced.
Step 4: Which tax and compliance risks must be fixed before you go to market?
You should remediate tax and compliance risks before marketing because buyers use them to reduce price, demand warranties/indemnities, or require funds held in escrow.
- GST classification errors: misclassified GST-free vs taxable supplies; incorrect input tax credit claims.
- PAYG withholding and STP issues: under-withholding and payroll reporting inconsistencies.
- Superannuation Guarantee: late or unpaid contributions.
- Employee entitlements provisioning: annual leave, long service leave (state-based complexity), redundancy exposures.
- Division 7A exposure (private companies): shareholder loans and unpaid present entitlements (UPEs) require careful handling under Division 7A rules (Income Tax Assessment Act 1936, Division 7A). ATO guidance and rulings should be reviewed where relevant to the fact pattern.
- Trust distributions and streaming integrity: trustee resolutions and distribution records.
- Asset registers and instant asset write-off history: ensure documentation supports prior claims.
- CGT framework: Income Tax Assessment Act 1997 (ITAA 1997), including CGT events (notably CGT event A1) and the small business CGT concessions in Division 152.
- Division 7A: Income Tax Assessment Act 1936 (ITAA 1936), Division 7A; ATO guidance on complying loans and benchmark rates.
- GST going concern: A New Tax System (Goods and Services Tax) Act 1999 and ATO guidance on GST-free supply of a going concern.
Step 5: Should you sell shares or sell assets in Australia?
You should choose share sale vs asset sale based on after-tax proceeds, risk transfer, and buyer preferences, because each structure produces different tax outcomes and different liabilities retained/transferred.
- Share sale:
- Asset sale:
- Small business CGT concessions: If eligible, they can materially reduce CGT on sale of shares or business assets (ITAA 1997, Div 152). Eligibility depends on tests such as the maximum net asset value test or small business entity test, and additional conditions for certain concessions.
- GST on going concern: The sale of a business can be GST-free if it satisfies going concern requirements and is documented correctly (GST law + ATO guidance). This is frequently mishandled in SME contracts.
Practical warning from due diligence: A contract that “intends” GST-free going concern treatment but fails to meet formal requirements can create an unexpected 10% GST issue and renegotiation at settlement.
Step 6: How do you set a defensible asking price and avoid “price-chipping”?
You set a defensible asking price by anchoring it to maintainable earnings, evidence-backed adjustments, and market-based multiples, then supporting it with a due diligence pack. Price-chipping occurs when buyers find uncertainty and use it to reduce price late in the process.
- Month-by-month revenue and margin bridge.
- Customer concentration analysis and churn.
- Pipeline and forward orders (where relevant).
- Working capital trends and seasonality.
- A “Quality of Earnings”-style schedule (even if informal) that ties to lodged tax and BAS positions.
- A clear schedule of add-backs with invoices and explanations.
Step 7: What is the best sale process: brokered sale, strategic buyer, or management buyout?
The best sale process is the one that matches your risk tolerance, confidentiality needs, and timeline. Accountants typically support whichever path produces the highest certainty of completion and best after-tax outcome.
- Brokered/marketed sale: broader buyer pool; requires a strong information memorandum and controlled data room.
- Strategic buyer approach: often higher multiples if synergies exist; can involve complex earn-outs.
- Management buyout (MBO): continuity benefit; financing and vendor risk can be higher.
- staged disclosure (teaser → NDA → IM → data room)
- controlled customer/staff disclosure timing
- clear authority matrix for buyer questions
Step 8: How do you become “due diligence ready” before the buyer asks?
You become due diligence ready by preparing a complete, consistent data room and pre-empting the most common buyer questions: tax, payroll, customer stability, and legal ownership.
- Tax:
- Employment:
- Legal/commercial:
- Operational:
A practical “deal saver” used in many Australian SME sales: A reconciled, accountant-prepared BAS-to-GL tie-out reduces GST and revenue integrity questions and often prevents a buyer from demanding a retention amount at settlement.
Step 9: What must be in the sale agreement to protect value and reduce post-sale disputes?
The sale agreement must precisely define what is sold, how the price is adjusted, what warranties apply, and how liabilities are apportioned. Ambiguity is where disputes—and withheld consideration—arise.
- Working capital or net debt adjustments: definitions must be tight and consistent with historical accounting.
- Completion accounts vs locked box: method must match the business and parties’ trust levels.
- Warranties and indemnities: scope, time limits, caps, and disclosure schedules.
- Restraint of trade: enforceability must be professionally considered; overreach can backfire.
- Treatment of employee entitlements: who pays what at completion.
- ensuring completion accounts methodology is workable
- ensuring tax warranties align with actual compliance history
- quantifying entitlements and provisions accurately
Step 10: What are the post-sale tax, settlement, and “money-out” steps that vendors often miss?
Post-sale steps are where value can leak if the vendor does not manage tax payments, CGT reporting, GST finalisation, and cash extraction planning. Settlement is not the end; it is the start of post-completion obligations.
- CGT reporting and timing: ensure records support the cost base, concessions, and eligibility tests (ITAA 1997; Div 152 if applicable).
- GST finalisation: confirm treatment in the BAS period of settlement (including any adjustments).
- Final payroll and STP actions: ensure final pays, leave payouts, and reporting are correct.
- Company/trust clean-up: address retained profits, franking account position, and any Division 7A issues before extracting funds.
- ATO payment plans or outstanding accounts: unresolved ATO debts can create personal stress and reputational risk even after sale.
Real-world scenario: A vendor sells a company but forgets that retained earnings are still inside the entity. Without a lawful extraction strategy (dividends, liquidation distributions, or other structured approaches), the “sale win” does not translate into personal liquidity as expected.
What are the most common deal killers in Australian SME business sales?
The most common deal killers are preventable and typically relate to uncertainty or unquantified liabilities.
- unreconciled GST and inconsistent BAS vs financials
- payroll and superannuation non-compliance
- customer concentration risk not disclosed early
- undocumented related-party transactions
- unclear IP ownership (especially in software and digital businesses)
- inability to evidence normalisation add-backs
- finance not approved for the buyer late in the process
How do accountants and advisers coordinate a sale to maximise after-tax proceeds?
A coordinated sale requires early alignment between accounting, tax, legal, and commercial advisers. In Australia, tax structuring is not an afterthought; it is a primary driver of net outcomes.
- Accountant prepares clean financial pack and normalisation schedule.
- Tax adviser models share vs asset sale outcomes and CGT concession eligibility (Div 152).
- Lawyer drafts heads of agreement with correct GST and adjustment mechanics.
- Broker/corporate adviser manages buyer process and confidentiality.
- All parties align on due diligence “single source of truth” documentation.
Next Steps: How Fedix can help your firm run a sale-ready finance function
Fedix helps Australian accounting practices prepare businesses for sale by accelerating the production of consistent, audit-ready financial information and reconciliations—reducing the time spent building due diligence packs and improving data confidence for buyers.
- Automated bank reconciliation: materially faster month-end close, helping you maintain sale-ready financials rather than “year-end-only” accounts.
- Cleaner working papers: faster substantiation of balances and adjustments, supporting due diligence responses.
- ATO integration workflows: improved visibility over tax lodgement history and compliance status (important for buyer confidence).
- Standardised practice processes: consistent outputs across multiple entities or groups being prepared for sale.
Learn more about Fedix and MyLedger at home.fedix.ai, particularly if your practice is supporting multiple clients through pre-sale clean-up and needs faster reconciliation and working paper production.
Conclusion: What matters most for a successful business sale in 2025?
A successful business sale in Australia in 2025 is primarily a preparation exercise: clean, reconcilable financials; defensible maintainable earnings; remediated tax and compliance risks; and a structure that protects after-tax proceeds. The best outcomes occur when vendors treat the sale like a project with a due diligence standard from day one, rather than a negotiation that starts after a buyer appears.
Disclaimer: This information is general in nature and does not constitute tax or legal advice. Australian tax and corporations law are complex and subject to change. Advice should be obtained from a qualified tax adviser and solicitor having regard to the specific facts, including eligibility for the small business CGT concessions and GST going concern requirements.