Buyer Guide
Nobody tells you this upfront, so here it is: business brokers work for the seller. That's not a criticism — it's their job. The seller hired them, the seller pays their commission (typically 5–12% of the sale price), and the seller expects them to get the highest possible price with the least possible fuss. Understanding this dynamic doesn't make brokers your enemy. It makes you a smarter buyer. The problem is that most first-time buyers walk into broker conversations like they're walking into a real estate open home — expecting the agent to help them buy. This is the guide nobody writes because brokers won't share it and buyers don't know to ask.
Before you pick up the phone, it helps to know what you're walking into.
The listing. The business appears on BizBuySell, Businesses For Sale, Bsale, or the broker's own website. The listing is deliberately vague — just enough to get you interested, not enough to identify the business. You'll see revenue ranges, generic industry descriptions, and phrases like "well-established" and "loyal customer base."
The enquiry. You submit an enquiry through the listing platform or contact the broker directly. They'll ask basic qualifying questions: Do you have the capital? What's your experience? Are you genuinely looking or just browsing?
The NDA. Before they tell you anything meaningful — including the business name — you'll sign a Non-Disclosure Agreement (also called a Confidentiality Agreement). This is standard and reasonable. The seller doesn't want their employees, customers, or competitors knowing the business is for sale.
The Information Memorandum (IM). Once the NDA is signed, you receive the IM — a document prepared by the broker (or the seller's accountant) that presents the business in its best light. Think of it as the business equivalent of a property brochure: professional presentation, selected financials, and a compelling narrative. It is marketing material, not a due diligence document. Treat it accordingly.
Questions and meetings. If you're still interested, you get to ask questions, meet the seller, and visit the premises. This is where the real information lives — not in the IM.
Offer and negotiation. You submit an offer (usually via a Letter of Intent or Heads of Agreement), negotiate terms, and if both sides agree, enter a due diligence period. The broker manages this process and keeps both sides moving toward completion.
Due diligence and settlement. You do your homework. If everything checks out, you settle. The broker gets paid. Our due diligence checklist covers everything you need to verify during this phase.
Brokers aren't hiding information maliciously — but they are curating it. Their job is to present the business favourably and manage the sale process efficiently. Here's what that means in practice:
They won't volunteer the bad news. If the biggest customer is thinking about leaving, if the lease renewal is contentious, if revenue dropped 20% last quarter — you won't read about it in the IM. The broker may not even know. Or they may know and believe it's "not material." Your job is to ask the questions that surface this information.
They'll frame everything as an opportunity. Declining revenue becomes "scope for a new owner to grow." An owner-dependent business becomes "the current owner has chosen not to hire a manager." A short lease becomes "flexibility for the new owner." Learn to translate broker-speak back into reality.
They control the information flow. Brokers decide what goes into the IM, when you get the financials, and how much access you get to the seller. Some brokers are open and collaborative. Others drip-feed information to keep you committed without giving you enough to find the flaws.
They'll qualify you hard — and that's actually fair. A good broker won't waste their seller's time with unqualified buyers. If they ask about your financial capacity, experience, and timeline, that's them doing their job. Don't take offence. Be prepared with honest answers.
First impressions matter more with brokers than most buyers realise. A broker with a popular listing might get 50–100 enquiries. They need to quickly sort the serious buyers from the tyre-kickers.
Lead with your capacity, not your curiosity. Don't call and say "I saw the listing and I'm interested." Call and say "I'm actively looking to acquire a business in the $800K–$1.2M range, I have pre-approved finance and personal capital, and this listing fits my criteria. I'd like to sign the NDA and review the IM."
Be specific about what you're looking for. "I'm looking for a trades business in Perth metro with $200K+ SDE and a team in place" tells the broker you've done your homework. "I want to buy a business" tells them you haven't.
Respond quickly. When the broker sends you the NDA, sign it the same day. When they send the IM, read it and come back within a week with specific questions. Speed signals seriousness.
Have your advisory team ready. Mention early that you have an accountant and lawyer engaged. This tells the broker you're not going to waste six weeks trying to find professional support after making an offer.
Be honest about your timeline. If you're six months away from being ready, say so. Brokers appreciate honesty and may keep you in mind for future listings. Pretending you're ready when you're not wastes everyone's time — and brokers have long memories.
The IM is the most important document you'll receive before making an offer. It's also the most misleading, because it's designed to sell — not inform.
Start at the back. The financials are usually at the end. Read them first. Everything the broker wrote in the narrative sections is designed to frame those numbers favourably. Form your own view of the numbers before reading the story.
Check the add-backs immediately. The seller's "adjusted" earnings will include add-backs — expenses removed to inflate the profit figure. Some are legitimate (the owner's personal car). Some are fiction (depreciation treated as optional, one-off legal fees that happen every year, the owner's spouse on payroll for a job that still needs doing). Challenge every add-back. At a 3x multiple, a $20K add-back you shouldn't have accepted just cost you $60K. Our valuation multiples guide explains how to assess these properly.
Look for what's missing. No mention of the lease? That's probably because it's short or uncertain. No customer breakdown? Probably because there's concentration risk. No staff information? Possibly because key people are leaving. The IM tells you what the seller wants you to focus on. The gaps tell you what they'd rather you didn't.
Verify the revenue independently. The IM shows the seller's version of the financials. During due diligence, you'll get the BAS (Business Activity Statements), which show what was actually reported to the ATO. If the IM says $1.2M revenue and the BAS shows $950K, someone has a problem — and it's about to become yours.
Count the qualitative claims. "Strong reputation," "loyal customer base," "significant growth potential," "motivated team" — these mean nothing without evidence. For every qualitative claim in the IM, write down the evidence you'd need to believe it. That becomes your due diligence question list.
Most buyers ask generic questions. Here are the ones that reveal what you need to know.
Ask the broker
Can I see the last 24 months of BAS lodgements alongside the management accounts?
This cross-references reported revenue with what was told to the ATO. Brokers expect you to ask for financials. They don't always expect you to ask for BAS.
Ask the broker
What does the business's working capital cycle look like — when does cash come in and when does it go out?
This tells you how much cash you'll need to keep the lights on after settlement. See our financing guide for planning working capital.
Ask the broker
What percentage of revenue comes from the top three customers, and what's the contractual basis for each?
If the answer is "about 60% from three customers, all on handshake arrangements," you've just identified your biggest risk.
Ask the broker
When did the business last lose a significant customer, and why?
The answer — or the awkward silence — tells you a lot.
Ask the broker
What would break if the owner took a month off tomorrow?
This reveals every single-point-of-failure in the operation.
Ask the broker
Walk me through how the owner spent last Tuesday.
Not the idealised version — the real day. This tells you more about the business than any org chart.
Ask the broker
Why is the owner really selling?
You'll get the polished answer first time. Ask again differently in a later conversation. The real reason — burnout, health, a customer loss, a pending regulation — matters for how you structure the deal.
Ask the broker
Has the business been listed before? How long has it been on the market?
A business that's been listed for 18 months has either pricing or quality issues. Both are worth understanding.
Ask the broker
How many businesses like this have you sold in the last 12 months?
This tells you if the broker understands the industry and has realistic pricing expectations.
Ask the broker
What offers have already been made, if any?
Some brokers will tell you; others won't. But asking signals that you know the game.
Not every business for sale has a broker. Smaller businesses (under $500K) are often sold directly by the owner. And some buyers prefer to approach businesses that aren't formally listed — the "off-market" approach.
Going direct makes sense when
Going through a broker makes sense when
Even when there's a broker, you can build a direct relationship with the seller during the process. Most brokers facilitate a meeting after the IM review stage. Use this meeting wisely — it's your best opportunity to assess the owner, the culture, and the things the IM can't capture. Walk the floor. Talk to the staff (with the owner's permission). The broker manages the deal; you need to understand the business.
Understanding how the broker gets paid helps you understand their behaviour.
The seller pays the commission — but you're funding it. The commission comes out of the sale proceeds, but the seller has priced the business knowing they'll lose 5–10% to the broker. A business the seller values at $900K gets listed at $1M so the seller still nets $900K after the broker's $100K fee.
When you negotiate the price down, you're also reducing the broker's fee. A broker who stands to earn $80K on a $1M sale earns $60K if you negotiate to $750K. In practice, most brokers are pragmatic. They'd rather close at $850K today than hold out for $1M and risk the deal collapsing. The broker's real enemy isn't a lower price — it's a deal that falls through entirely.
Pressure to make an offer before you're ready. "We have three other interested parties" may be true — or it may be manufactured urgency. A good broker respects your process. A pushy one is either desperate or dishonest.
Resistance to providing financials. If the broker won't give you BAS, bank statements, or detailed P&L after you've signed the NDA and expressed serious interest, something is being hidden. Walk away.
Inconsistent information. If the IM says one thing and the broker says another in conversation, trust neither and verify independently.
Broker also acting as the seller's accountant or lawyer. This happens in smaller deals and it's a conflict of interest. When the same person is selling the business and preparing the financials, accuracy tends to suffer.
No engagement agreement. A reputable broker has a formal engagement with the seller that defines their authority, fee structure, and obligations. If the broker seems vague about their mandate, they may not be the exclusive agent — which means you might be able to deal directly with the seller.
The broker process is designed around people who can make phone calls during business hours, attend meetings at short notice, and spend weeks reading IMs and formulating questions. If you're working a demanding job while trying to buy a business, you're at a structural disadvantage.
Whether you tackle this yourself or get help, the principles are the same: understand the broker's incentives, prepare before you call, ask the questions that matter, and never let the IM do your thinking for you.
The buyers who win aren't the ones with the most money. They're the ones who show up prepared.
ThatDeal makes the broker calls so you don't have to. We gather the intelligence and give you the facts — no spin, no fluff.
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