Buying an established business can be faster than starting from scratch. The premises, the customers and the systems already exist. That head start carries risk, because you inherit whatever the seller has built, including the parts they would rather not discuss.
In Queensland there is a state layer to the checks as well, covering matters such as licences, leased premises and employment obligations, which sit alongside the federal rules that apply everywhere in Australia. The Queensland Government publishes guidance on buying a business through its business portal, and it is a sensible first stop before you commit to anything.
Why Queensland buyers need their own checklist
Business regulation in Australia is split between federal and state authorities. Company and tax matters are largely federal. Licences to trade, premises arrangements and many employment issues are dealt with under state rules, so a checklist written for another jurisdiction will not always fit Queensland.
The practical result is that you should verify every licence, permit and approval directly with the Queensland Government business portal or the relevant local council rather than relying on the seller’s assurance that everything is in order. A seller who has run a business for years may never have considered whether a particular approval transfers to a new owner.
1. Test your own readiness first
Guidance from the Small Business Development Corporation is blunt about this: buying an established business is a major commitment of time, money and energy. Before you look at a single listing, work out what you can afford, what you can borrow, and how much of your own time the business will demand in the first year.
It helps to have the following sorted before you start negotiating:
- A realistic budget that covers the purchase price plus working capital and transaction costs
- A finance position confirmed in writing, not assumed
- A clear picture of the hours you can commit each week
- An accountant and a lawyer you can call on quickly
Guides from NAB and CommBank cover the same ground and generally suggest speaking with a business banking specialist early. Knowing your borrowing limit before you negotiate puts you in a much stronger position, and it stops you chasing a business that was never within reach.
2. Choose the right business and industry
Business.gov.au notes that choosing the right business depends on your needs and your lifestyle, and that you should take the time to research and understand both the business and its industry. Established operations can be appealing because they already understand how to run successful operations, and they may find it easier to obtain finance than a start-up.
Marketplaces such as SEEK Business list both businesses and franchises for sale. Treat every listing as marketing rather than evidence. Franchise arrangements in particular come with their own agreement, fees and restrictions, so read that document closely before you fall for the numbers in the advertisement.
3. Understand why the Seller is selling
Ask the question directly, then test the answer. Retirement, a move interstate or a change of focus are all plausible reasons for a sale. A sudden listing after years of steady trading deserves more scrutiny than a well-worn explanation.
You will also find plenty of scepticism online, including the widely repeated argument that if a business were genuinely profitable the owner would keep it or pass it to family. That view is too sweeping to act on by itself, but it is a useful prompt to check the numbers hard rather than accept the story you are told.
4. Read the Financial Statements properly
Profit and loss statements and balance sheets are the starting point. Ask for several years of financial statements rather than only the most recent set, and look for trends instead of a single strong year. Where you can, compare the figures against bank statements and activity statements the seller is able to produce.
Be alert to add-backs. Sellers often present a profit figure that strips out one-off costs or adds back owner wages to make the business look stronger than it is. Every adjustment should be something your accountant can verify against source documents. If the seller will not provide records at all, that tells you plenty.
5. Check tax records and outstanding debts
Tax records appear on every published checklist for good reason. They show whether the business has kept up with its obligations and whether there is a history of lodgement problems. Ask for confirmation of the current position, including any payment arrangements that are in place.
Debts matter even more when you buy an entity rather than a set of assets, because liabilities can travel with the business. Your lawyer should confirm exactly what you are buying and what you are taking on before you sign anything binding.
6. Verify the Assets, Stock and Equipment
Build an asset register from what the seller tells you, then check it against what is actually on site. Plant, equipment, vehicles, fit-out, intellectual property and goodwill all need to be identified and valued separately from the trading profit.
Find out which items are owned outright, which are leased or financed, and whether anything is being used as security for a loan. Stock is usually counted and valued at settlement, so the contract needs a clear mechanism setting out how that count happens and who pays for it.
7. Look closely at customers and suppliers
A customer list is only valuable if those customers stay. Check how concentrated the revenue is. If one or two customers provide most of the income, the business is far riskier than the headline turnover suggests. Ask about any recent losses and whether the seller has agreed to a restraint of trade.
On the supplier side, review the terms of any agreements, whether they can be assigned to you, and whether pricing depends on personal relationships the seller is about to walk away from. Supplier agreements are frequently overlooked until after settlement, when it is too late to negotiate.
8. Staff and their entitlements
Employees come with accrued leave, long service entitlements, agreements and expectations. Ask for a full list of staff, their roles, their pay arrangements and how long each person has been there. Key staff who intend to leave after settlement can change the value of the business significantly.
Confirm the employment position with the relevant workplace authority and with your lawyer. If you are buying an entity, you may inherit obligations that already exist. If you are buying assets and offering roles to existing staff, the way you approach that needs to be handled carefully.
9. Premises, Licences and Queensland Approvals
If the business trades from leased premises, the lease is one of the most important documents in the deal. Check the term remaining, the rent and outgoings, any options to renew, and whether the landlord will consent to an assignment. A profitable business in premises you cannot secure is not a business you can buy.
Then work through the licences and permits. Ask the Queensland Government business portal and your local council what is required for that specific activity and confirm whether each approval transfers automatically or needs a fresh application in your name. Do this before you sign, not after settlement when the business is already yours.
10. Get the contract and process right
The usual sequence runs from setting a budget and searching, to signing a confidentiality agreement, to submitting an offer, to a due diligence period, and finally to a binding contract. Each stage deserves its own document, and your offer should not commit you before due diligence is complete.
Read the sale contract for the conditions that protect you. That includes what happens if the records turn out to be wrong, how stock is valued, what training and handover the seller will provide, and whether the seller is restrained from opening a competing business nearby once the deal settles.
How the Steps Fit Together
| Stage | What it covers | Your focus |
| Preparation | Budget, finance, personal readiness | Know your limit before you look |
| Search and first review | Industry research, listings, initial meetings | Test the seller’s story |
| Confidentiality and offer | Information exchange, indicative terms | Keep the offer conditional |
| Due diligence | Financials, tax records, assets, customers, staff, lease, licences | Verify everything independently |
| Contract and settlement | Binding terms, stock count, handover, restraints | Get advice before signing |
Where Legal Advice Fits
Due diligence is where most of the value in a purchase is either gained or lost. A lawyer and an accountant working together can tell you which records to demand, which clauses in the contract are doing the heavy lifting, and what the seller has quietly left out of the paperwork.
FC Lawyers advises buyers and sellers on business and commercial matters from offices in Brisbane and Sunshine Coast. If you are working through a purchase in Queensland, contact the team before you sign a confidentiality agreement or submit an offer, so the conditions you need are built in from the start.
Frequently Asked Questions
How long does due diligence take when buying a business?
There is no fixed period. Timing depends on how complex the business is, how quickly the seller produces records, and whether a lease, licence or franchise agreement is involved. Set a realistic timetable in the contract and avoid being pushed into a settlement date you cannot meet without cutting your checks short.
Can I buy a business without a lawyer?
You can, and plenty of people do. The risk is that the sale contract and the due diligence conditions are exactly where your money is protected. At a minimum, have a lawyer review the sale contract, the lease and any restraint clauses before you sign, even if you handle the negotiations yourself.
What is the difference between buying a business and buying a company?
Buying assets means you acquire specific things such as equipment, stock and goodwill. Buying the entity means you take on the whole structure, including its trading history and its liabilities. The two are priced differently and carry different levels of risk, so confirm which one the seller is proposing before you make an offer.
What should I do if the seller will not provide financial records?
Treat it as a warning sign. Financial statements, tax records and bank records are the standard material for due diligence on any established business. Without them you cannot value what you are buying or verify the seller’s claims. Make your offer conditional on receiving them and be prepared to walk away.
Do I need to check licences with the Queensland Government?
Yes. Licences and permits often sit with the state, and some do not transfer automatically to a new owner. Check with the Queensland Government business portal and your local council for the specific activity before you sign, rather than relying on the seller’s assurance that the approval will simply carry across.
If you’d like to discuss your options if you’re looking at buying a business in Queensland, contact our team today. We can provide you with the best options going forward and provide you with a fixed fee quote to ensure a smooth purchase.
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