Every business owner eventually reaches a decision point where he thinks about buying or selling a business. There can be multiple reasons behind it, such as maybe you’ve found a business you want to buy and grow into something bigger. Maybe you’ve built something over the years, and you’re starting to wonder what selling a business might look like.
Either way, the question underneath it all is the same: how do I make this decision properly, instead of just wondering how it will work out? That’s the gap we see most often. Sometimes, people get excited about a listing, or an offer, long before they’ve thought through the structure, the risk, or what the deal actually means for them in twelve months.
At SBX, we will help you slow down at the right moment and help you understand your options, structure the deal properly, and move forward with a plan, than watch you sign something you’ll spend years untangling. So let’s walk through what actually matters when you buy a business, and what actually matters when you sell one.
Buying a Business: It’s a Structuring Decision, Not Just a Purchase
Buying an existing business can be a smart way to take ownership because it will help you to inherit customers, systems, staff, and a trading history, things that would take years to build from scratch. However, “buying an existing business” doesn’t mean “that you’re safe”; it means that there’s a history you need to investigate before making it yours.
Always remember that before you buy a business, you need to review its licences and permits, its contracts and leases, and whether the landlord has agreed to transfer the lease into your name. Apart from that, you can also review outstanding supplier agreements, the condition of plant and equipment, the assets and intellectual property included in the sale, the state of inventory, and any liabilities the business is carrying.
Once the review is done and you get complete information, you should move to valuing the business and negotiating a price. Because it is the part that most people underestimate, which can change their perspective about the business that they are actually taking on.
- Buy the assets, and you can be selective; that means that you can take the equipment, the goodwill, the contracts you want, and leave the liabilities behind. It’s generally considered the lower-risk path for a buyer, though things like existing employee contracts and third-party agreements can’t simply be carried across; they often need to be renegotiated.
- Buy the shares, and you’re stepping into the whole company by understanding its history, its reputation with suppliers and banks, but also its past liabilities, whatever they turn out to be. That’s why due diligence matters even more in a share sale.
Neither path is automatically “better.” However, it depends on the business, the industry, and what you’re trying to achieve. This is exactly the kind of decision that benefits from a second set of eyes before contracts are signed, not after.
Selling a Business: Preparation Beats Timing
If you’re on the other side of the table, the instinct is often to focus on finding a buyer. But the businesses that sell well are the ones that got their house in order months before a buyer ever walked in.
According to the expert guidance for sellers, it is always worth sitting with the amount that you have before listing your business. It will help you to get your mind clear on why you’re selling, referring back to your succession plan if you have one, and understanding that a sale can trigger obligations around employee entitlements and tax on the sale of assets.
They also flag something many owners forget that if you’re disclosing customer, staff or supplier information to a prospective buyer during negotiations, you have obligations under the Australian Privacy Principles to handle that properly.
Once you’re at the negotiation stage, the business sale agreement is where the real detail lives, including property, equipment, stock, and fixtures. Apart from that, it also includes all conditions on which parties need to meet, and clauses like non-compete or confidentiality restraints that protect the value of what you’ve built even after you’ve handed over the keys.
The thing about these concessions is that they’re not something you can work on after completing the settlement. The order you apply them in will help you to structure the business sits in, and the timing of the sale all affect the outcome. It is exactly why this conversation needs to happen with an adviser well before a buyer is at the table, not the week before you sign.
Where SBX Fits Into This
We’re not here to tell you which business to buy, what price to accept, or where to put the proceeds. We are here to help you understand your options clearly enough to make the decision yourself, we will help you build the structure, tax position, and risks properly worked through in advance. That might look like reviewing the numbers behind a business you’re considering buying and helping you decide between an asset or share purchase.
It will help you to prepare your business and your structure years before you plan to sell, so that when the right buyer turns up, you’re not scrambling. Apart from that, it will also help you to be a part of the conversation that will help you understand what’s actually at stake in the deal in front of you. Since buying or selling a business is one of the biggest decisions an owner makes, it deserves a proper plan before it deserves a signature.
Conclusion
Whether you’re buying your first business or preparing to sell one you’ve spent years building, the pattern is the same to understand the numbers before making any final decision. The owners who come out ahead aren’t the ones who moved the fastest, they’re the ones who understood their options, got the structure right, and had a plan before they were under pressure to decide.
Due diligence, deal structure, and tax positioning are not the paperwork to get through after making the final decision. It is where you make the difference between a decision you feel confident about and one you spend years managing the fallout from. That’s really the whole idea behind how we work at SBX.
We’re not here to tell you which business to buy or push you toward a deal. We’re here to help you understand what you’re actually looking at, structure it properly, and walk into the decision with clarity instead of guesswork. If a purchase or a sale is somewhere on your horizon, even a year or two out, the best time to start the conversation is now, not once there’s an offer on the table.
FAQs
- Should I buy the assets of a business or the shares in the company?
It depends on the business and what you’re trying to achieve. An asset purchase generally lets you pick the assets and contracts you want while leaving unwanted liabilities behind, which is why it’s often considered lower-risk for buyers. A share purchase means taking on the entire company, its history, relationships and reputation, but also its existing liabilities, so it usually calls for deeper due diligence. Talk it through with your accountant before you commit to either structure.
- How long does due diligence usually take when buying a business?
There’s no fixed timeframe because it depends on the size and complexity of the business, but it shouldn’t be rushed. You’ll typically need to review licences and permits, contracts and leases, supplier agreements, plant and equipment, assets and IP, inventory, and any outstanding liabilities before you’re in a position to value the business and negotiate confidently.
- How early should I start preparing if I want to sell my business?
Ideally, well before you plan to list it — months, or even a year or more, if you want to address issues that might otherwise show up during a buyer’s due diligence and put your tax position in the best possible shape. Preparation, not timing the market, tends to be what determines how smoothly a sale goes.
- Do I have to pay capital gains tax when I sell my business?
Possibly, but there are concessions designed specifically for small businesses. If you meet the eligibility conditions, you may be able to reduce, disregard or defer some or all of the capital gain on an active business asset, and if you’ve held the asset for at least 12 months, a further 50% CGT discount may also apply before other concessions come in. Eligibility and the order concessions are applied in can materially change your outcome, so it’s worth getting advice before the sale, not after.
- What should be included in a business sale agreement?
At a minimum, it should set out the assets included in the sale (property, equipment, stock, fixtures), the agreed price and payment terms, any conditions that need to be met for the sale to proceed, and any restraint clauses, such as non-compete or confidentiality terms, that protect the business’s value after settlement.
- Can SBX help me decide whether to buy a specific business?
We won’t tell you which business to buy or whether a deal is “worth it” in isolation, but we can help you understand the structure, the numbers, and the risks behind the decision, so you’re the one making an informed call.
