More questions owners ask before going to market

Not on its own. A buyer asks for tax returns for a minimum of 3 previous years and a profit and loss statement for 3 years or longer, per Business Queensland’s due diligence list. Annual accounts answer the first request.

The second request is the current year to date, and it has to reconcile to the lodged returns. Where it does not, the buyer’s accountant reconciles it, at your cost in time and in credibility.

This one takes a single reporting cycle to fix. Ask your accountant for management accounts that agree to the last lodged return, then keep them monthly from there.

Some buyers will. A bank generally will not lend against add-backs it cannot verify from source documents, so add-backs shrink the pool of buyers who can actually complete a purchase.

There is a second exposure. Section 18 of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth), prohibits conduct in trade or commerce that is misleading or deceptive. It has no small business exclusion and it cannot be contracted out of. Figures that overstate earnings sit inside that section whatever the contract says about warranties.

The fix is to take the personal costs out and let one full financial year run. Reported earnings rise, add-backs fall, and the number becomes one a lender can use.

Before, because the remaining term is what a lender assesses. A term under 2 years with no option is difficult to finance, and a buyer borrowing against the business needs security of tenure.

The landlord’s decision period is 1 month after receiving full particulars, under the Property Law Act 2023 (Qld) s142(5), which commenced 1 August 2025. A request for further information under s142(4) restarts that clock. The landlord must not unreasonably withhold consent, and under s142(3) that duty cannot be excluded.

Watch the option window written into your own lease, because an option not exercised in time is gone. Business Queensland’s preparation guidance tells you to consider a shorter term or a longer term lease, whichever makes the business more attractive.

Yes. It is fixable by normalisation, but only where it is identified, quantified and evidenced. Left unlabelled in the accounts, a wage to someone who does not work in the business reads to a buyer’s accountant as unreliability rather than as an adjustment.

A related party rent, a related party management fee and a director’s loan account do the same thing. Each makes the reported earnings figure something other than what the buyer will experience.

Normalise the arrangement to a market figure and let a full financial year run. The buyer’s wage cost and occupancy cost are then real, and the earnings are transferable rather than argued.

You find out your shrinkage and your obsolete proportion on settlement day, in front of the buyer. The REIQ describes the standard conditions for its business sale contract as covering stock valuation, and stock is normally counted and valued at or immediately before settlement, then adjusted against the price.

Count it now and write off the obsolete lines. The next stocktake carries the corrected figure, and the write off lands in a year you are not selling on.

It is a valuation problem before it is a legal one. Where the rent sits below or above a market figure, the earnings a buyer sees are not the earnings the buyer will have.

Normalise the rent to a market figure in the accounts and disclose the arrangement in full. Business Queensland’s due diligence list names leases, including terms and conditions, under a buyer’s financial investigation.

If you intend to keep the property and lease it to the buyer, the term you offer becomes part of the price. The buyer’s lender assesses that term the same way it would assess a third party lease.

You will be asked. ATO compliance is a named item in Business Queensland’s due diligence list, and a seller is normally asked to warrant that there is no undisclosed ATO liability.

A payment plan is effective engagement in the ATO’s own material on disclosure of business tax debts. Effective engagement is what keeps a debt of at least $100,000 overdue by more than 90 days out of credit reporting. Before disclosure the ATO gives 28 days from receiving its notice to take action.

Disclosed at the outset, the balance is a settlement adjustment paid from the proceeds. Discovered in due diligence, it is a re-pricing event, because the buyer now doubts the rest of your disclosure as well.

They remove an entire due diligence category, and they are one of the few fixes that is immediate rather than needing a financial year to show. The Business Queensland list names staff and contractor agreements, and staff awards covering entitlements and conditions.

Without them a buyer cannot verify award coverage, classification, overtime treatment or accrued entitlements. The buyer also cannot price the Fair Work Act 2009 (Cth) Part 2-8 decision on whether to recognise prior service.

Pair the agreements with a schedule per employee: start date, classification, accrued annual leave, and accrued Queensland long service leave under the Industrial Relations Act 2016 (Qld) s95.

It is the sharpest version of the employment gap. A mischaracterised contractor is an unpaid superannuation liability that reaches back years, and it is discovered by a buyer’s accountant rather than volunteered by a seller.

The superannuation guarantee rate is 12 per cent of ordinary time earnings from 1 July 2025. Unpaid superannuation guarantee charge is one of the three obligations the director penalty regime makes a director personally liable for, alongside PAYG withholding and GST.

In a share sale that exposure travels with the entity, because the buyer takes the company as it stands. Have the characterisation reviewed by your accountant or an employment lawyer before you go to market, not during due diligence.

It is a schedule of each item, its serial number, its finance status and its position on the Personal Property Securities Register. Business Queensland’s due diligence list names plant, equipment and vehicles, maintenance records and leases, and outstanding debt or title over assets.

Without it you cannot warrant title to the plant, and the buyer cannot run serial number searches at ppsr.gov.au. A search returns a certificate you can keep as proof of whether a security interest was registered at that moment.

Building the register takes weeks rather than years. Clearing registrations for finance you have already paid out removes a settlement condition before it becomes one.

No, but it has to be handled from day one. A general security agreement does not attach to one item. It attaches to everything the company owns, which catches goodwill and stock as well as plant.

A bank holding that security has to release the assets being sold, and it will not do that unless it is being repaid or has agreed to the sale. Tell your solicitor and your broker the bank position at the start rather than at settlement.

Registered interests are paid out from settlement funds, the secured party gives a release or an undertaking, and the registration comes off the register. Under the Personal Property Securities Act 2009 (Cth) s267(2), an unperfected interest vests in the grantor on winding up, which protects a liquidator rather than a buyer.

It can change which small business capital gains tax concessions you qualify for, so this is a conversation with your accountant before you list, not after you sign.

The basic conditions require a CGT small business entity with aggregated turnover of less than $2 million, or satisfaction of the maximum net asset value test, under which the total net value of CGT assets owned by you, connected entities and affiliates must not exceed $6 million. The retirement exemption has a lifetime limit of $500,000 per individual, or per CGT concession stakeholder for a company or trust. Those are current ATO thresholds at 14 August 2026.

Some tests are measured at the time of the CGT event, and others turn on how long you have owned the asset. Timing a sale without advice on those tests is a way to lose a concession you would otherwise have had.

Three, as a minimum. Business Queensland asks for tax returns for a minimum of 3 previous years and a profit and loss statement for 3 years or longer, to determine market variations.

That is why one strong year does not carry a price on its own. Two complete comparative years is what a buyer’s accountant models and what a lender’s credit team assesses.

Yes, and Business Queensland’s preparation list says so directly, calling for formal, written contracts to secure customers and suppliers.

The mechanism sits in the structure of the sale. On an asset sale, customer contracts are novated one at a time and each customer can decline. Where there is no contract to novate, there is nothing to transfer, and the buyer is paying for a relationship that can leave with you.

The contract itself is immediate. The renewal history behind it takes longer to build, which is the argument for starting now rather than in the month you list.

No, but the fixes available in that window are documentary rather than financial. Signed employment agreements, an entitlement schedule, an asset register, a current search against your own entity on the Personal Property Securities Register, a stocktake, a documented ATO payment plan and a top ten customer list are all achievable in weeks.

What six months cannot do is move the earnings a buyer can see. Removing personal expenses or normalising a related party rent shows up in the next full financial year, not in the three years already lodged.

That is the honest split, and it is worth knowing which side of it you are on. Do the documentary work, and accept that the number you go to market with is the number your last three years support.

Run through the nine areas a buyer assesses: whether the business runs without you, whether the financials are clean, customer concentration, recurring versus one off revenue, your team, plant and equipment, licences and compliance, systems and documentation, and whether there is a credible growth story. Businesses commonly fall short on two or three of those, and those gaps are usually closeable in twelve to twenty four months.

Owner dependence. If you hold the customer relationships, quote the work, solve the problems and make every decision, a buyer is not purchasing a business, they are purchasing a job that depends on someone who is leaving. Buyers discount heavily for it and it is the most common issue across every sector.

Twelve to twenty four months in a typical case, longer if there is significant work on owner dependence or customer concentration. That is why finding out early matters more than finding out accurately. Two years of targeted work on the right two or three issues changes what a buyer finds when they look. Negotiation can only trade on what is already there.

Yes. If one customer is more than about twenty five percent of revenue, buyers get uneasy. Over forty percent and it materially affects the price, because the buyer is assessing what happens if that customer leaves after settlement. Broadening the base takes time, which is exactly why it is worth identifying well before you go to market.

That is what the appraisal conversation is for. It is free, confidential and carries no obligation, and it covers where your business currently sits against what buyers assess, what they would question, and which two or three things would move the number most in the time you have.