Selling your business might be the biggest financial event of your working life.
For many Australian small business owners, it represents the final payday after years of long hours, missed holidays, and risk-taking that no wage earner could truly understand.
But even good businesses fail to sell well. Or they sell for less than they should.
Not because of the market, or bad luck, or buyer dishonesty.
Often, it comes down to the way the business was prepared and presented.
Profit is central to every sale.
Buyers want to know how much they can earn, how long it will take to recoup their investment, and what risk they are taking on.
But showing strong profit is not just about a higher price.
It also attracts more buyers, reduces negotiation time, and makes finance approval easier.
Whether you plan to sell in twelve months or five years, the steps you take now will directly affect what ends up in your bank account.
Here is how to maximise your profit when selling a business.
Start With the Right Profit Figure
The number buyers care about most is not revenue. It is not turnover, and it is definitely not what you feel the business is worth.
They are focused on what is known as seller’s discretionary earnings, or SDE.
SDE is the total profit available to one full-time owner-operator.
It includes the net profit, plus your wage, superannuation, and any discretionary or one-off expenses that are not essential to the business. These are known as add-backs.
Examples of add-backs include:
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Your personal vehicle lease
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Travel that was not business critical
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Family members on payroll who are not working
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One-off legal or accounting costs
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Equipment write-offs or tax depreciation
These figures must be documented, logical, and verifiable.
A buyer’s accountant or lender will ask to see them. If your numbers cannot be explained or supported, they will not be counted.
A well-prepared add-back schedule can increase your stated profit significantly, which in turn improves the overall valuation.
Understand the Profit Multiple
Most small businesses in Australia sell for two to three times their SDE.
That is your valuation multiple. So if your adjusted profit is $200,000, you can expect offers in the $400,000 to $600,000 range.
However, the multiple is not fixed. It rises or falls depending on several factors:
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How dependent the business is on the current owner
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How stable and repeatable the profit is
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The size and loyalty of the customer base
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How systemised the operations are
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Whether your industry is growing or shrinking
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How difficult it is to train a new owner
The multiple is not just a number. It is a reflection of risk.
The lower the risk for the buyer, the higher the multiple they will accept.
You cannot control the market, but you can control how your business looks to buyers.
If you take steps to reduce reliance on yourself, show repeatable profit, and document your systems clearly, you are more likely to receive a higher offer.
Clean Financials Matter More Than You Think
Buyers do not believe what they are told. They believe what they see in writing.
Your profit must be supported by formal financials that align with your BAS, tax returns, and internal accounts.
If you are still using outdated spreadsheets, shoebox receipts, or casual estimates of monthly income, you are not ready to sell.
Work with your accountant to prepare full financial statements for the past three years. Make sure the numbers are consistent across all sources.
Any mismatches between your P&L and your ATO lodgements will raise concerns during due diligence.
Keep things simple. Clean numbers build confidence. Confident buyers make stronger offers.
Improve Profit Before You Sell
It is possible to increase the profit of your business in the year or two before you sell. And every extra dollar of profit is multiplied when it comes time to negotiate.
Start by identifying waste.
Can you renegotiate supplier costs? Cancel underused subscriptions? Improve rostering efficiency? Cut unproductive advertising?
Even modest savings can translate into stronger SDE figures.
Review your pricing.
Are you charging enough for your services or products? Have your margins been squeezed by inflation or competition?
Do not make sudden increases before listing, but aim to build consistent profitability across the current and previous year.
Also, take a closer look at your debtors.
Outstanding payments and write-offs can silently reduce your earnings.
Chase them now, not later.
Show What the Buyer Is Really Getting
Your financials tell part of the story. But profit alone will not close a deal.
Buyers want to understand how the profit is generated, who the key staff are, what systems are in place, and how much effort is required to run the business.
They also want to know what happens to that profit once you leave.
If you are still handling the sales, the customer service, the purchasing, and the HR, your profit looks less repeatable. Even if it is strong on paper.
To maximise your result, create a business that operates without you.
Train your staff. Delegate responsibility. Write clear procedures. Use software to automate tasks where possible.
A well-run, semi-autonomous business commands a premium.
Offer a Fair Transition Period
Buyers will feel more confident if you offer support after the sale.
That might be two to four weeks of on-site handover, or a part-time consulting arrangement for a few months.
Some owners worry that this will tie them down or complicate the exit. But it often improves the price and reduces friction.
You do not need to run the business forever.
You just need to show that you will be available to guide the new owner through the first phase.
That kind of support can be worth thousands in added goodwill.
Avoid Overpricing and Under-Explaining
One of the most common mistakes sellers make is listing the business at an unrealistic price and then struggling to explain why.
Overpricing does not lead to better offers. It leads to silence.
Be prepared to justify your asking price with solid financials, documented add-backs, and a clear summary of what the buyer receives.
If the price is high compared to similar businesses on the market, be ready to show why.
That might include strong year-on-year growth, excellent staff retention, valuable IP, long-term supplier contracts, or a genuine competitive advantage.
Do not bluff. Buyers will test your assumptions.
Final Thought
You do not get to sell your business twice.
The price you receive reflects not just the strength of your business, but how well you prepared it for sale.
Every decision you make in the final year, from your expenses to your systems to your handover plan, affects what someone will pay.
Selling is not about tricking buyers or hiding flaws.
It is about giving them a clear, honest view of a business that can thrive in their hands.
When you get that right, you create confidence. And confidence leads to stronger offers.
If you want to maximise your profit, start preparing now.
Clean up the numbers. Write things down. Delegate. Streamline. Make the business look as good on paper as it feels when you walk through the door each morning.
You’ve built something valuable.
Make sure you get what it’s worth.
Your Next Step
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Explore our current listings of Australian businesses for sale at BusinessForSale.com.au