Buyers, their accountants and their lenders will pull your business apart before they pay for it. A health check lets you do it first, on your own timetable, so you can fix problems or explain them before they cost you on price. This guide gives you the checklist buyers work through, explains why clean books matter so much, and covers what to spend before a sale, what you will walk away with and when to start.
In short
Every buyer asks the same questions. Is the profit real? Will the customers stay? Can I run this without the current owner? Is the lease secure? If you cannot answer them clearly, buyers either walk away or lower their offer to cover the risk.
A health check also protects the deal once you have a buyer. When problems surface late, in due diligence, contracts fall over. A business that comes back on the market after a failed sale makes the next buyers cautious, because they assume something is wrong with it.
And sales are not always planned. Illness, a partnership split or an offer you cannot refuse can all bring a sale forward. A business that is always sale ready can move quickly on its owner’s terms.
Could your business run without you for a month? If you were in hospital for four weeks, would sales, staff and suppliers carry on? If not, buyers will discount the price, because they are buying a business built around one person.
Work through each area. Anything you answer no to is something to fix, or to be ready to explain, before you go to market.
One fix often helps several areas. Documenting your systems, for example, reduces reliance on you, makes the business easier to finance and shortens due diligence.
Some owners used to keep part of their income off the books to save tax. Today that is a costly mistake. Tax authorities are better than ever at spotting it, and when you sell, undeclared income is worth nothing. Buyers, their accountants and their lenders base the price on the profit in the financial statements, and they ignore claims of cash on top or loads of potential.
Because businesses sell on a multiple of earnings, unrecorded income costs you several times over.
| Declared | Kept off the books | |
|---|---|---|
| Extra profit each year | $30,000 | $30,000 |
| Profit a buyer will pay for | $30,000 | $0 |
| Value at a 2.5 times multiple | $75,000 | $0 |
The figures are illustrative. The multiple for your business depends on its size, industry and risk.
Credibility matters too. Every time a seller explains away the accounts, the buyer’s doubt grows. Clean, accurate financials that are ready for due diligence before you list are the simplest way to protect your price. See how to value a business.
Spend too much and you will not get it back. Spend too little and buyers will deduct it from their offer. As a rule, run the business as if you were keeping it for at least another 12 months.
| Spending decision | What to do |
|---|---|
| Repairs and maintenance | Keep up with them. Putting them off is false economy, because buyers will take the cost off the price. |
| Major equipment purchases | Avoid them close to a sale if you can. If you must buy, consider leasing so the new owner can take over the lease. |
| Marketing | Keep spending at your normal level. A sudden increase before a sale looks like you are pumping up turnover. |
| Refits | If a refit is due soon, it is often better to let the buyer do it their way. If it is needed now, complete it, secure a new lease, then sell. |
| Professional advice | Do not save money by doing it yourself. Good advisers usually pay for themselves in the price and terms. |
| Marketing the sale | Allow a reasonable budget so the business reaches as many qualified buyers as possible. |
The sale price is not what lands in your bank account. Some owners only find out after settlement that tax, loan payouts and fees have taken a large share. Work out your likely net proceeds early, with your accountant, so there are no surprises.
| Cost | What to plan for |
|---|---|
| Capital gains tax | Small business CGT concessions may reduce or remove it if you qualify. Get advice before you sell. See capital gains tax on the sale of a business. |
| Loans and finance | Business loans, equipment finance and any break costs are usually paid out at settlement. See selling a business with debt. |
| Release of security | Lenders must release their security over business assets before settlement. |
| Employee entitlements | Accrued leave may be paid out to staff or adjusted in the price, depending on the contract. |
| Broker and legal fees | Agree them in writing at the start. |
The best time to start preparing for a sale is the day you start or buy the business. In practice, give yourself 12 to 24 months. This timeline shows what to focus on and when.
| Before the sale | Focus on |
|---|---|
| 2 years or more | Exit strategy, reducing reliance on you, simplifying the management structure, growth plans and registering trade marks |
| 12 months | Clean financials, debtors and stock under control, lease term secured, equipment in good order |
| 3 to 6 months | Appraisal to set a realistic price, operating manuals, a due diligence pack, advisers briefed and premises presentation |
| At listing | A confidential marketing campaign, buyer qualification and normal trading at full pace |
For the full sale process, see how to sell a business, step by step.
Buyers pay for profit they can verify, but they choose between businesses on future potential. Every business is either growing, standing still or going backwards, and a business that is growing is easier to sell.
A simple way to plan growth is the 70-20-10 split from the Harvard Business Review: put about 70% of your effort into your core customers and products, 20% into extending into nearby markets or offerings, and 10% into new ideas. For a business heading to sale, the core matters most. Grow it steadily, and document the opportunities you have not had time to pursue, so a buyer can see them.
It is a review of your business through a buyer’s eyes, covering financials, owner reliance, customers, systems, premises, lease and legal matters, and growth. It shows what to fix or explain before you sell.
Ideally 12 to 24 months before you plan to sell, so there is time to fix what it finds. It is also worth doing every year or two even if you are not selling, so the business stays sale ready.
You can start with the checklist on this page. A business broker can then review it against what buyers in your industry look for, and your accountant can check the financials and tax position.
The financials. Buyers want three years of accounts, tax returns and BAS that agree with each other, and current year-to-date figures. Next they look at owner reliance, the lease and customer spread.
Fix what you reasonably can before you go to market, and disclose the rest early. Problems found in due diligence cost more on price, and can end the sale.
You can, but buyers will only pay for the profit they can verify, so undeclared income adds nothing to the price. It also creates tax risk. Talk to your accountant well before you sell.
It can, by finding problems you can fix before buyers see them, and by making the business easier to finance and quicker to sell. Most of all, it stops buyers discounting the price for risks they cannot measure.
Related guides
Talk to a specialist broker about where your business stands and what would add the most value before you sell. Confidential and no obligation.
Talk to a broker near you: Brisbane, Sydney, Melbourne, Perth, Adelaide, Gold Coast, Sunshine Coast, Darwin.
This guide is general information, not legal, tax or financial advice. Speak to your own advisers about your situation before you sell.
Checklist based on Benchmark’s experience preparing businesses for sale. 70-20-10 growth split: Harvard Business Review, Managing Your Innovation Portfolio (2012). Checked 23 October 2026.
