15 Questions To Ask When Buying A Business

Buying an established business can be a smart way to fast-track your growth, but it pays to ask the right questions before you sign anything.

A thorough approach helps you understand what you’re actually buying, the risks you’re taking on, and the value you’re getting.

Below, we’ve set out 15 essential questions to ask when buying a business in Australia, grouped into practical categories so you can work through them like a checklist. We’ll also flag where legal advice makes a real difference, so you can negotiate confidently and minimise surprises after settlement.

Before You Make An Offer: Big-Picture Questions

1) Why Is The Owner Selling?

This sounds simple, but it often reveals a lot. Are they retiring, moving interstate, focusing on another venture, or facing market or cash flow issues?

Look for evidence that supports the seller’s story, such as performance trends, industry shifts, or personal circumstances. If the reason is unclear, that’s a cue to dig deeper.

2) What Exactly Am I Buying?

Clarify whether you’re buying assets (stock, equipment, website, brand, customer lists) or shares in the company. The difference affects risk, tax, liabilities and transfer logistics.

If you’re not sure which suits your situation, compare a share sale with an asset sale to understand how liabilities and contracts are treated in each structure.

3) How Has The Business Performed Over The Last 3 Years?

Ask for financial statements (P&L, balance sheets, tax returns) and management reports. Look beyond headline revenue to margins, seasonality, customer concentration and recurring revenue.

If the business dipped or spiked, ask why. One-off events might not continue under your ownership.

4) What Are The Growth Drivers And Risks?

Identify the levers that actually move the needle, such as top customers, a unique brand, a reliable supply chain, or a great location.

Then list the risks: supplier dependency, key person reliance, emerging competitors, regulatory change, or technology reliance. Understanding both sides will shape your price and deal terms.

Financial & Legal Due Diligence Questions

5) Can I Review Financial Records In Detail?

Request at least three years of financials, BAS statements, bank statements and aged receivables/payables reports. Compare what the seller says with what the numbers show.

Look for unusual one-off expenses, related-party transactions, and whether owner wages or benefits have been treated fairly in the accounts.

6) Are There Any Liabilities Or Claims I’m Inheriting?

Ask for a schedule of liabilities, including loans, tax debts, superannuation obligations, customer credits, warranties and pending disputes. If you’re doing a share purchase, this becomes even more important because liabilities usually remain with the company.

If the business offers credit or finances goods, check whether assets and receivables are registered and secured correctly on the PPSR.

7) What Contracts Are In Place-And Can They Be Assigned?

List out customer agreements, supplier contracts, distribution deals, software licences, and any guarantees. Many contracts require consent before they can be assigned or novated to you.

Ask for copies of any “key contracts” that make up a large portion of revenue or supply. Confirm term, termination rights, price adjustments, and change-of-control clauses.

8) What’s In The Lease And Can I Take It Over?

If premises are part of the value (retail, hospitality, warehousing), the lease terms can make or break the deal. Check remaining term, options to renew, rent review mechanism, outgoings, make-good obligations and assignment requirements.

If you plan to negotiate amendments or a new lease, a Commercial Lease Review can help you understand the risks and your leverage before you commit.

People, Customers & Operations Questions

9) Who Are The Key People-And Will They Stay?

Map the team: who holds critical knowledge or relationships? Ask whether they intend to stay and on what terms.

Get clarity on current roles, award coverage, leave balances, super and any bonus or commission plans. If you hire staff post-settlement, ensure you issue a compliant Employment Contract and follow Fair Work obligations from day one.

10) How Dependent Is The Business On The Current Owner?

Some businesses are held together by the founder’s relationships or expertise. If that’s the case, you may want a handover period, training, or a consultancy agreement to ease the transition.

Consider a retention or earn-out structure tied to performance to keep the seller engaged for a period after settlement.

11) Who Are The Major Customers And Suppliers?

Ask for a breakdown showing the top 10 customers by revenue and top suppliers by spend. Customer concentration risk (e.g. one client representing 40% of sales) should inform your offer and how you structure your protections.

Confirm whether any key customers or suppliers require approval before contracts can be transferred or renewed.

Brand, IP, Technology & Compliance Questions

12) What Intellectual Property Am I Getting?

Clarify ownership of trade marks, logos, domain names, product designs, copyright in content, and any proprietary software or databases. Ask for the status of registrations and assignment documents.

If brand value is a key part of the deal, ensure trade mark ownership is clear and, if needed, plan to register your trade mark in your name post-settlement.

13) What Systems, Licences And Data Are Included?

List the technology stack (point-of-sale, CRM, eCommerce, hosting, marketing tools) and confirm licence transferability and costs. Ask who owns the data-and get warranties about lawful collection and use.

If the business collects personal information, you’ll want to sight their Privacy Policy, consent mechanisms and data handling practices to check alignment with the Privacy Act and your future operations.

14) Are There Any Regulatory, Consumer Law Or Safety Issues?

Ask whether there have been compliance breaches, product safety recalls, ACCC complaints, or warnings. Confirm the business has processes to comply with the Australian Consumer Law (ACL), especially around advertising, refunds and warranties.

If the industry is licensed (for example, food, health, building, liquor), verify all required permits are current and transferable.

Deal Terms, Price & Handover Questions

15) How Will We Structure The Deal, Price And Protect Against Surprises?

Once you’re comfortable with the opportunity, focus on the mechanics. Key issues include:

• Sale Structure: Decide whether it’s a share purchase or asset purchase after weighing risk, tax and transfer implications. If you’re unsure, compare the pros and cons of a share sale vs asset sale early.
• Purchase Price Adjustments: Will there be a stock valuation at settlement? How are debtors/creditors handled? Is there a working capital target?
• Warranties & Indemnities: These protect you if things aren’t as promised (e.g. undisclosed liabilities, IP ownership, compliance). Tailor them to your due diligence findings.
• Restraint & Non-Solicitation: Ensure the seller can’t immediately compete or poach key staff and customers within a reasonable scope and time.
• Handover & Training: Agree on what support you’ll receive and for how long.
• Vendor Finance or Earn-Out: If part of the price is deferred or contingent, document the triggers, security and dispute process clearly.

These terms are captured in the contract. Your Business Sale Agreement should reflect the commercial deal, allocate risk fairly, and set a clear pathway from exchange to completion.

How To Work Through The 15 Questions (A Practical Process)

Step 1: Initial Discussions And Heads Of Terms

Start with a high-level conversation and a non-binding term sheet (often called heads of agreement). It helps align price expectations, structure and timing before investing in deep due diligence.

Step 2: Due Diligence-Financial, Legal, Operational

Plan your review according to the size and complexity of the business. As a guide, you’d usually request financial statements and BAS, key contracts, lease, IP schedules, policies, licences, HR details and a litigation register.

Where helpful, engage specialists (accountant for financial health; lawyer for contracts, leases, IP and risk). A tailored due diligence process keeps things efficient and focused on the issues that matter.

Step 3: Identify Gaps And Negotiate Protections

Use what you find to shape the deal. If customer concentration is high, consider earn-outs. If the lease is short, push for a variation or landlord consent before settlement. If IP needs cleaning up, make it a completion condition.

Ask for warranties on key risks and ensure you have remedies if something is inaccurate.

Step 4: Finalise The Contract And Completion Checklist

Work through the contract schedules to make sure assets, contracts, employees and licences are correctly listed and transferrable. Confirm completion deliverables: signed assignments, landlord consent, employee transfers, releases of security interests, and updated insurances.

Where assets or receivables are secured, confirm all relevant releases and updates to security registrations are actioned, including any PPSR considerations flagged during diligence.

Step 5: Plan The Handover And First 90 Days

Lock in training, supplier and customer introductions, systems access, and marketing updates (website, social, branding). Make sure operational risks (like stock reorders or seasonal staffing needs) are covered during the transition period.

Red Flags To Watch For (And What To Do)

Inconsistent Numbers Or Missing Documents

If financials don’t line up with BAS or bank statements, pause and request clarification. Incomplete records, especially around payroll, super and tax, warrant extra caution.

Non-Assignable Contracts Or Weak Lease Position

If key contracts or the premises cannot be assigned or renewed, consider a price adjustment, a condition precedent, or walking away. The value you’re buying must be transferable.

Unclear IP Ownership Or Brand Risk

If logos, domain names or designs are owned by the seller personally or contractors without assignment, fix it before completion. Confirm trade marks and domains will be assigned at settlement and update registrations promptly afterwards.

Compliance Issues Or Hidden Disputes

Unresolved regulatory issues, safety incidents or customer disputes can become your problem after settlement. Address them via remediation plans, specific warranties or indemnities, or price.

Negotiation Tips To Protect Your Position

• Sequence Your Conditions: Prioritise landlord consent, key contract assignments and any critical licence transfers as “must-have” conditions before you commit to completion.
• Match Price To Risk: If diligence reveals risks, reflect that in price, earn-out mechanisms or stronger contractual protections.
• Use Clear Timelines: Map out milestones from exchange to completion with dates for consents, training, stocktake and data migration.
• Document Everything: Keep notes of representations and confirmations-then ensure they’re reflected as warranties or undertakings in the contract.
• Think Post-Settlement: Line up new customer terms, your updated Privacy Policy, supplier agreements, and staffing arrangements so you’re ready to hit the ground running on day one.

Key Legal Documents You’re Likely To Encounter

• Business Sale Agreement: Sets the price, assets or shares being sold, warranties, restraints, completion steps and dispute processes.
• Assignment/Novation Agreements: Transfer customer and supplier contracts to you if you’re doing an asset purchase.
• Lease Assignment Or New Lease: Transfers or grants the right to occupy the premises, often with landlord consent and new guarantees.
• IP Assignment Documents: Transfer trade marks, domain names, social media handles, designs and copyright materials into your entity.
• Employment Transfer Letters/Offers: Move staff across to your entity with agreed terms and recognition of entitlements where applicable.
• Completion Deliverables List: A checklist ensuring you receive keys, logins, data exports, customer lists, stock, and security releases.

If the seller is helping fund the transaction, document it properly with clear security, repayment terms and remedies-especially if any portion of the price is deferred or performance-based.

Key Takeaways

• Ask targeted questions about performance, risks, contracts, people and compliance to see the real picture before you buy.
• Decide early whether a share sale or asset sale suits your risk profile and transfer needs, and reflect that in your contract.
• Deep-dive into financials, key contracts, the lease, IP ownership and regulatory history-then negotiate protections tied to what you find.
• Make the Business Sale Agreement work for you with clear warranties, restraints, conditions precedent and a practical completion checklist.
• Line up post-settlement essentials-employment terms, customer and supplier arrangements, brand/IP transfers and policies-so you can operate smoothly from day one.
• Getting tailored legal support during diligence, lease review and contract negotiation can save time, reduce risk and strengthen your bargaining position.

If you’d like a consultation on buying a business in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.