Buying a Business in Perth

The order you do things in matters

Buying a business is one of the biggest financial decisions most people make, and the order you approach it in changes the outcome. Buyers who fall in love with a business and then go looking for finance often find the deal does not stack up at the price they have already agreed in their head. Buyers who understand what is fundable before they make an offer negotiate from a stronger position and settle with fewer surprises.

This guide walks through the process the way it actually unfolds in Perth, from the search to settlement, with a focus on the parts that affect whether the deal funds. It is written from the finance side of the table, because that is where we sit, and it is where a lot of otherwise good deals come unstuck.

1. Decide what you are actually buying

Before scrolling listings, get clear on what you want and what you can run. A business you understand, in an industry you know, with transferable revenue, is a very different proposition to a lender than a business in a field you have never worked in. Your background is part of the credit assessment, so it pays to be honest early about where your experience adds value and where it does not.

2. Search and shortlist

Most Perth businesses for sale are listed through business brokers or marketplaces, and many of the best opportunities are sold quietly. As you shortlist, look past the headline asking price to the quality of the earnings. A cheaper business with shaky, owner-dependent revenue can be a worse buy than a dearer one with stable, transferable income. The price is only meaningful next to what the business reliably earns.

3. Understand how the business is valued

Most small and medium businesses are valued on a multiple of earnings, either EBITDA or seller's discretionary earnings. The multiple reflects risk. Predictable, recurring, transferable revenue earns a higher multiple. Revenue that depends on the current owner or a few large customers earns a lower one. The price then breaks down into tangible assets, the equipment, stock and fit-out, and goodwill, the value above those assets. That split matters enormously for finance, because lenders fund tangible assets and goodwill very differently.

4. Do proper due diligence

This is where you confirm the business earns what the seller says it earns, and that those earnings will survive the handover. Work through it with your accountant and solicitor.

• Financials verified against tax returns and BAS, not just a profit and loss summary
• The lease, its term, options and assignment conditions
• Licences, registrations and accreditations the business depends on
• Customer concentration, how much revenue comes from how few clients
• Supplier contracts and terms
• Staff, entitlements and who is essential to the business
• How much of the revenue walks out with the current owner
• The real reason the business is being sold

5. Work out the full cost, not just the price

The purchase price is rarely the whole number. A realistic budget includes your deposit or equity contribution, stock at settlement, legal and due diligence costs, any transfer duty, and a working capital buffer for the first weeks under your ownership, when supplier terms, debtor collection and revenue continuity are all still settling. Buyers who budget only for the price are the ones who run into trouble shortly after settlement. You can map this quickly with our business acquisition calculator, which separates the deposit, the duty, the working capital and the funding gap.

6. Get the finance tested before you sign

This is the step most buyers leave too late. By the time a heads of agreement is signed, the structure is largely set, and the terms around price, earn-outs and vendor finance all affect how a lender will assess the deal. Getting a broker involved during the negotiation, not after, means the deal can be shaped to be bankable. Lenders assess a business purchase on the trading history, the strength and transferability of the cash flow, the proportion of goodwill in the price, the security available, and your background as the buyer. A well-prepared, well-structured application reads completely differently from a rushed one. This is the heart of what we do in acquisition finance, and where most of the value is added.

7. Settle, then manage the transition

Approval is not the finish line. Conditions need to be cleared in step with the settlement date, and the first weeks of ownership need working capital and a plan for staff, suppliers and customers. Deals that are structured with the transition in mind settle cleanly. Deals that treat settlement as the end often hit a cash flow squeeze a month later.

A note on goodwill

If most of the price sits in goodwill rather than hard assets, expect more scrutiny from lenders, and do not assume a no from your own bank means the deal is dead. It usually means the structure needs work and the right lender needs to be found. We cover this in detail on our goodwill finance page.

Frequently asked questions