Who Buys a Business and Actually Runs It? Your Options If You Don't Want Private Equity
Most owners think the big decision is the price. For anyone who cares what happens next, the bigger decision is which kind of buyer you sell to, because that decides what your business becomes.
By Marcus Hahnheuser, Co-Founder
RACQ, ex Virgin Australia, Swyftx & ATO
Most advice about selling a business is about getting the highest number. Fair enough, and if the number is all you care about you can stop reading here. Plenty of owners want something else as well. They want the business to keep going, their crew to still have jobs in three years, and the name on the vans to survive. If that's you, the biggest decision isn't your asking price or which agent you list with. It's who you sell to.
Quick answer
Key facts
- 1.You are not legally required to use a broker or sales agent in Australia. You are going to need an accountant and a solicitor.
- 2.Broker commission on a business of this size is commonly 5 to 10% of the sale price.
- 3.Private equity has to return its investors' money, usually inside 3 to 7 years. That obligation shapes every decision after settlement.
- 4.In a share sale employment usually continues unchanged. In an asset sale staff are technically terminated and re-employed, and continuity of service is a contract issue.
- 5.Commitments about your team, your brand and your handover can be written into the sale terms. Most owners never ask.
The five kinds of buyer, and what each does next
Every buyer will tell you they respect what you've built. That's free to say. What tells you more is the structure behind them, because that determines what they have to do next.
| Buyer type | What drives them | What usually happens to the team | Typically pays |
|---|---|---|---|
| Owner-operator | Buys one business to run as their own job, long term. No fund, no exit clock. | Usually kept. They need the team; they can't run it alone. | Fair, rarely top dollar |
| Private equity / roll-up | Must return investor capital, generally in 3 to 7 years. | Back office often consolidated. Field staff usually retained. | Strong |
| Competitor / trade buyer | Wants your customers, contracts or licences. | Highest risk of overlap redundancies. | Often the highest |
| Your employees | Continuity. They already know the business. | By definition, kept. | Lowest, usually staged |
| Family | Succession and legacy. | Kept. | Often below market |
One thing about that table is worth saying out loud: the buyer who pays most is frequently the one most likely to make your people redundant, because the saving they are paying for is your back office. And we are an owner-operator buyer ourselves, so read that row with appropriate suspicion and test it against someone who has no stake in your answer.
Why "not private equity" is a reasonable thing to want
Private equity is structured to do a particular job, and it does that job well. A fund raises money from investors on a promise to give it back, multiplied, within a defined period. Everything that happens after settlement flows from that promise. The business gets improved, yes, but it gets improved in the ways that make it sellable again: standardised systems, consolidated overheads, professional management inserted above the people who were running it. Then it is sold to somebody else, and your team meets a second new owner.
There is also a practical point. At $1.5M to $3M of revenue you are usually below the size where real private equity funds operate. What you are more likely to encounter is a roll-up: a group assembling many small businesses in your trade, often backed by a fund, doing the consolidation at the group level. The economics are similar, and so is the eventual outcome. Your business becomes a branch.
What actually happens to your people
This is the question owners ask us most, usually near the end of a conversation, and often slightly apologetically, as though it isn't a commercial matter. It is. Here is roughly how it works in Australia, though your solicitor is the person to confirm it for your situation.
- In a share sale, the buyer purchases the company itself. The employing entity doesn't change, so your team's employment generally continues exactly as before, with their service and entitlements intact.
- In an asset sale, the buyer purchases the business's assets and goodwill. Technically your employees end their employment with you and start with the buyer. Whether accrued service, leave and redundancy entitlements transfer depends on the Fair Work Act provisions and on what the contract says. Some entitlements can be left with you as the seller. Get this checked properly, because it is real money and it affects real people.
- Separately from any of that, you can negotiate terms. Commitments on retaining the team, honouring pay and conditions for a defined period, keeping the trading name, or not relocating the depot can all be written into the sale agreement. They are ordinary commercial terms. Most owners simply never raise them, and then discover afterwards that they could have.
Selling without a business broker
You can absolutely sell your business directly. Plenty of people do. What you cannot skip is the professional advice, and this is where owners get into trouble: they conflate the broker with the accountant and the solicitor. The broker sells. The accountant tells you what you'll actually keep after tax. The solicitor makes sure the contract does what you think it does. Going direct means dropping the first one, not all three.
Here's the trade-off, both columns.
| Going direct | Listing with a broker |
|---|---|
| No commission - commonly 5 to 10% of the price | Commission, but paid on success |
| Confidential; staff and competitors don't find out | A listing is public, or semi-public |
| You deal with the decision-maker | The broker manages the process for you |
| No competitive tension - one buyer, one offer | Multiple buyers can bid against each other |
| You must validate the price yourself | Market exposure helps establish the price |
| Faster when the buyer is genuinely ready | Slower, but a wider net |
A good broker earns their fee, particularly if your business is attractive to several buyers and you want them competing. The place the incentives diverge is that a broker is generally paid on completion, which creates a pull towards a deal rather than necessarily your best deal. That's how the incentive is shaped rather than any dishonesty, and it's worth knowing about when you're being encouraged towards an offer.
Six questions that tell you which buyer you're actually talking to
If I were sitting on your side of the table, these are the six I'd ask.
Anyone can present well for an hour. These are harder to fake. Watch the pause before the answer as much as the answer itself.
- Where does your money come from, and when does it need to be paid back? No repayment date means no exit clock.
- How many businesses do you own, and how long have you held them? A pattern of short holds is a pattern.
- Who will be running this business on the Monday after settlement, by name? If they can't name a person, it's a portfolio decision.
- Which roles do you expect to change in the first year? A serious buyer has thought about it. "None at all" is usually a sales answer.
- Will you put the team commitments in the contract? Verbal reassurance is worth exactly nothing at settlement.
- Can you show me evidence of your funding? Ask early. Deals collapse over this after the legal bills have been paid.
Where we fit, briefly
We're Sandi and Marcus, a Brisbane couple, and we're buying one essential services business in South East Queensland to run ourselves. Not a fund, not a roll-up, no investors waiting to be repaid. We came out of Canva, KPMG, RACQ, Virgin Australia and Suncorp, and this is the thing we're doing next, personally.
The honest version of our pitch includes the limitation: we are one buyer, so we can't create competitive tension, and a trade buyer who can fold your back office into theirs may well be able to pay more than we can. If maximising the headline number is your priority, a broker running a competitive process is probably the better route, and we would rather say that than waste your time. What we can offer is a direct conversation with the people who will actually own it, terms about your team that we'll put in writing, and a handover shaped around what you want rather than what suits us.
If you'd like a sense of the numbers before you speak to anyone, the free business appraisal gives you an indicative range and an exit-readiness score in a few minutes, with no obligation and no salesperson attached. If you'd rather just talk it through, start a confidential conversation, including if you're a year or three away. Realistically that's the better time to start.
Where to start
You can negotiate the price, the structure and the timing. You can't renegotiate the buyer. Once it's signed, what happens to your people and your name comes down to who you sold to and what they need to do next. So work out which kind of buyer you're dealing with before you get attached to their number.
This guide is general information to help you understand your options, not financial, legal or tax advice. Lumina Ventures is not licensed to provide financial advice, and how employee entitlements transfer depends on your structure, your agreements and the deal type. Please speak with your own accountant and solicitor before making any decisions.
Frequently asked questions
What is an owner-operator buyer?
An owner-operator buyer is an individual or a small partnership who buys one business and then personally runs it, usually as their full-time job. They're sometimes called search funds, self-funded searchers or entrepreneurs through acquisition. The distinguishing feature isn't the money, it's that the person signing the contract is the person who'll be in your business on the Monday after settlement. They typically buy one business, not a portfolio, and hold it for a long time.
How is an owner-operator buyer different from private equity?
Private equity buys with other people's money and has to return it, usually inside three to seven years, which means the business is always being prepared for its next sale. Cutting costs, merging back offices and changing management are how that return gets made. An owner-operator has no fund, no external timetable and no exit obligation, so the incentives point at running the business well rather than at repositioning it for resale. Private equity also tends to buy larger businesses, so at $1.5M to $3M revenue you're more likely to meet a roll-up acquirer than a genuine PE fund.
Can I sell my business without a broker in Australia?
Yes. There's no legal requirement to use a business broker or sales agent, and plenty of owner-run businesses change hands directly between a seller and a buyer. What you can't skip is the professional advice: you still need an accountant and a solicitor, because the contract, the tax position and the structure are where the money actually is. Going direct saves commission (commonly 5 to 10% on a business of this size) and keeps the sale confidential, but you lose competitive tension between buyers and you have to validate the price yourself.
What happens to my staff when I sell my business?
It depends on the deal type and on the buyer, so it's worth settling early. In a share sale the employing entity doesn't change, so employment generally continues as it was. In an asset sale your employees are technically terminated and re-employed by the buyer, and whether their accrued service and entitlements carry across is a matter for the contract and the Fair Work Act. This is genuinely worth paying your employment lawyer to get right. Separately from the legal position, you can negotiate commitments about roles, pay and redundancies as part of the sale terms, and a buyer who intends to keep the team will usually agree to put that in writing.
Is an owner-operator buyer going to pay me less than private equity?
Sometimes, and you should assume so when you're comparing offers. A trade buyer who can strip out your back office, or a fund buying a much larger business, can rationally pay more than one person buying one business with their own capital. What an owner-operator can often offer instead is speed, certainty, confidentiality, a genuine handover, and terms about your team that another buyer won't entertain. Whether that's worth a difference in price is your call, not ours, and it's a fair question to ask any buyer directly.
Marcus Hahnheuser
Co-Founder, Lumina Ventures · RACQ, ex Virgin Australia, Swyftx & ATO
Sandi and Marcus are a Brisbane couple acquiring one essential services business in South East Queensland to own and run themselves. They also run hands-on Business Audits that help owners grow EBITDA and prepare for a sale.
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