A 360 ONE guide to due diligence, valuation, Section 52 and getting the deal right.
Buying or selling a business is one of the most significant moves an owner makes, and the outcome is shaped long before the contract is signed. Sellers who prepare early command stronger interest and a cleaner sale. Buyers who do thorough homework avoid expensive surprises. This guide walks through both sides of the transaction and the steps that protect value on each.
Selling: Preparation is the Advantage
The strongest sales are planned, not reactive. Surveys consistently find that many owners look to exit without a plan in place, which limits both the price and the certainty of the outcome. Starting early gives you time to do the things that lift value.
Clean, accurate financials over at least the past two years give a buyer confidence and give you a credible basis for your asking price. Tidy operations, documented processes, secure key contracts and a clear picture of what is being sold all reduce a buyer’s perceived risk. A considered exit plan, ideally developed well ahead of the sale, lets you time the market and your own circumstances rather than being forced to accept whatever is on the table.
Understanding What Your Business is Worth
A business valuation gives you a grounded view of your position for a sale, and also for succession, finance and strategic decisions. Valuations commonly draw on a multiple of sustainable earnings, the value of net assets, or a combination, with the right approach depending on the nature of the business. A considered valuation, built on your actual numbers and your market, replaces guesswork with a figure you can stand behind in negotiation.
Section 52: A Key Step for Victorian Small Business Sales
If you are selling a small business in Victoria, a Section 52 statement is often a legal requirement. Under the Estate Agents Act 1980, a vendor must provide a Statement by a Vendor of a Small Business where the total price for goodwill, plant, equipment and fittings is $450,000 or less. The statement sets out the financial performance of the business, generally over the past two years, and is usually prepared by the seller’s accountant.
The consequences of skipping it are serious. Where a required Section 52 statement is not provided before the buyer signs or pays a deposit, the buyer may be able to withdraw from the contract within three months and have their money refunded. Preparing it correctly and early is part of a smooth sale.
Buying: Due Diligence Protects You
For a buyer, due diligence is where confidence is earned. It is the structured process of verifying what you are buying before you commit. Sound due diligence covers the financial position, including verified profit and loss figures and the quality of earnings, the legal standing of contracts, leases and licences, and the operational reality of how the business runs and depends on its current owner.
Buying an existing business or a franchise brings its own considerations. An existing business offers a track record and established customers, while a franchise offers a proven system within set rules. In both cases, the lease is often central, so reviewing the lease terms and any assignment conditions early is essential, particularly where a franchise agreement and a lease need to work together.
Term Sheets + Negotiation
Before the formal contract, a term sheet, sometimes called heads of agreement, sets out the key terms both sides intend to agree, such as price, structure, timing and conditions. It aligns expectations early and makes the formal documents faster to finalise.
Negotiation then turns on the detail. The structure of the deal, whether the sale is of business assets or of shares in the company, has significant tax and risk consequences for both sides. Other terms such as earn outs, restraints of trade and the treatment of employees all shape the final outcome and are worth working through with advice.
The Tax That Comes With the Deal
Capital gains tax usually applies to a business sale, and the small business CGT concessions can substantially reduce or even eliminate the gain for eligible sellers. These concessions were retained in the 2026-27 Federal Budget, even as the broader CGT discount changes from 1 July 2027. GST treatment also needs care, since a sale may qualify as a going concern. Because the tax outcome can be the difference between a good sale and a great one, it belongs at the start of the planning, not the end.
Current Figures + Recent Changes (as at FY2025-26)
- Section 52 statement (Victoria): required where the price for goodwill, plant, equipment and fittings is $450,000 or less.
- Small business CGT concessions: retained unchanged in the 2026-27 Federal Budget.
- CGT discount: the 50 per cent discount applies to gains before 1 July 2027, with the new indexation and minimum tax regime from that date. See the 360 ONE capital gains tax guide.
How 360 ONE Partners With You
A transaction of this size rewards a partner who sees the whole picture. We partner with you through valuation, due diligence, Section 52 preparation and the tax planning that shapes the result, so you move with a clear view of the numbers and the confidence to act on the right terms. Whether you are building towards an exit or stepping into a new venture, we help you get the deal right.
This is the 360° partnership in action: the transaction, the tax and your longer term plan considered as one connected picture.
Sources. business.gov.au and the Australian Taxation Office for buying and selling a business, due diligence, the small business CGT concessions and GST, and Consumer Affairs Victoria and the Estate Agents Act 1980 (Vic) for the Section 52 vendor statement. Figures are current as at the 2025-26 financial year.
This guide is general information and does not take account of your personal circumstances. Speak with 360 ONE before acting on it.