M&As in Australia: How to Sell a Business Successfully

Your step-by-step guide from registering a business name to signing the sales contract

Mergers and acquisitions (M&As) are common in the Australian business landscape. There were almost 1,700 M&A deals announced in Australia in 2022, with a total value of close to $130 billion.

Businesses buy or merge with other businesses for several reasons:

• To expand into new markets or distribution channels
• To acquire proprietary technologies or products
• To increase market share
• To reduce competition
• To improve efficiency and reduce costs

If you’re one of the 1,500+ Australian business owners wondering whether to sell your business or stay the course, it’s worth weighing up all the considerations before signing a deal. 

How to sell a business in Australia

Some small business owners plan to sell from the start. From the moment they register a business name, they aim to attract attention from private equity firms, larger rivals or portfolio brands.

Others strike gold with a disruptive idea or innovative solution. Without intending to, they find themselves being wooed by a bigger fish. 

If you are thinking about selling your business, Here are some key steps:

1. Understand your motivations for selling

A seller’s motivations significantly impact the valuation and acquisition terms. Those motivations can also derail the sale in the late stages, for example, if one person in a partnership gets cold feet.

2. Get your finances in order

Buyers will need to see financial statements, tax returns and other documentation in the due diligence process. Preparing these can be complex and time-consuming, so it’s worth engaging a qualified accountant to help.

3. Market your business

Marketing to an M&A audience is very different from building a consumer brand. A sales brochure and website are a good start, but be prepared to attend networking events where you need a well-honed elevator pitch.

4. Negotiate the sale

Once a buyer is interested, they will consider several factors such as financial performance, assets and liabilities, brand value, proprietary IP and market share to determine the price and takeover terms. 

5. Close the deal

When you are happy with the final sale terms, it’s time to ink the deal and sell your business. Some M&As see founders staying on in a different role, while others buy out the owner to assume full control.

Our top tips for a successful sale

Register a business name that resonates

Registered business names matter to buyers because they matter to customers. Just ask a Holden owner whether they know that General Motors bought the brand nearly 100 years ago.

You should also thoroughly research the business name availability to ensure you can register a .au domain name and trademark.

Ensure the business name is renewed

Business names must be renewed every one or three years. Keep a close eye on your renewal date, or use Registry’s online business name renewal portal for peace of mind. Just don’t miss your business name renewal deadline, as you might encounter business name availability problems that disrupt your exit strategy.

Maintain good records 

As well as keeping you organised and compliant with laws and regulations, detailed records streamline the due diligence process during an acquisition.

Build a loyal following

Buyers like a loyal customer base. You can build your following with excellent customer service, high-quality products or services, and a strong brand identity.

Develop proprietary IP

Proprietary intellectual property (IP) gives your company a competitive edge against bigger businesses. Just look at what Uber did to the taxi industry. IP includes things like technology, products, trademarks, patents and copyrights.

Focus on scalability

Many portfolio brands buy businesses purely because they are scalable. Food and beverage brand Lion is a great example, buying brands like Little Creatures and Four Pillars with the intention to scale internationally.

Build a strong team

When taking on business partners or hiring senior employees, look for people who share your vision for the business. When it comes time to negotiate the sale, you will know everyone is on the same page.

Invest in technology

Analysts think that tech is one of the biggest opportunities for M&A in Australia. Large businesses will often look to buy pre-packaged solutions because it’s cheaper and faster than building from scratch, like Google acquiring Fitbit or Microsoft buying Skype.

Just browsing? That’s OK too.

Even if you are not quite ready to sell, attention from potential buyers is a good sign. The conversation can be a catalyst to think about exit strategy, succession planning, company valuation, or even your next venture.

This brings us to the final consideration when selling: business name availability. 

M&A terms often include non-compete clauses, meaning an outgoing founder may be unable to launch a new venture in the same space. The terms could prevent you from referring to the registered business name you worked hard to build, even if the brand is discontinued after the sale.

Business name availability is a tricky area. Registry makes it simple. 

Our user-friendly business name registration and renewal tools are the affordable, reliable and no-fuss solution that helps you build a booming business. We also offer .au domain registration and hosting, custom email addresses, trademarks and discretionary trust services, so you can take care of business in one place.