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. Price matters, and every kind of buyer can pay a fair one. But 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 is who you sell to, more than your asking price or which agent you list with.
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 is commonly around 3 to 10% of the sale price depending on its size, often plus upfront fees.
- 3.Private equity usually sells each business within 3 to 7 years to return money to its investors. That shapes every decision after settlement.
- 4.In a share sale employment usually continues unchanged. In an asset sale employment with you ends and the buyer offers new jobs, so how service and entitlements carry across needs checking.
- 5.Commitments about your team, your brand and your handover can be negotiated into the sale terms. Owners don't always think to 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 | How they usually price it |
|---|---|---|---|
| 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. | On what the business earns, the same way most buyers do |
| Private equity / roll-up | Usually sells each business within 3 to 7 years to return investors' money. | Back office often consolidated. Field staff usually retained. | On earnings, plus what the business adds to the group |
| Competitor / trade buyer | Wants your customers, contracts or licences. | Highest risk of overlap redundancies. | On the customers and contracts they gain, and savings from overlap |
| Your employees | Continuity. They already know the business. | By definition, kept. | Usually paid in stages, often with vendor finance |
| Family | Succession and legacy. | Kept. | Often below market, by choice |
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 your business usually ends up as one branch of a bigger group.
What actually happens to your people
It can feel awkward to raise, as though it isn't a commercial matter, but 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. Your employees' employment with you ends, and the buyer offers jobs to the people it's taking on. The Fair Work Act has specific rules for how service, leave and redundancy entitlements carry across, and some entitlements may stay with you as the seller to pay out. Get this checked properly, because the entitlements can add up to real money.
- 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 negotiated into the sale agreement. They are ordinary commercial terms, and owners don't always think to ask. Your lawyer can tell you how any promise would be enforced after settlement.
Selling without a business broker
You can sell your business directly, and plenty of people do. What you can't skip is the professional advice, and this is where owners get into trouble, because they treat the broker, the accountant and the solicitor as one job. The broker finds and manages buyers, the accountant tells you what you'll keep after tax, and the solicitor makes sure the contract does what you think. Going direct only removes the broker.
The trade-off looks like this.
| Going direct | Listing with a broker |
|---|---|
| No commission, which is commonly around 3 to 10% of the price | Commission, mostly paid on success |
| Easier to keep confidential | Listed, though usually anonymously and under NDA |
| You deal with the decision-maker | The broker manages the process for you |
| Your accountant or a valuer checks the price | Several buyers can bid against each other |
| Faster when the buyer is ready to go | Slower, but a wider net |
A good broker earns their fee, particularly when several buyers are competing for your business.
Six questions that tell you which buyer you're 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, but a weak position is hard to explain smoothly. Watch the pause before they reply as much as the reply itself.
- Where does your money come from, and does anyone need you to sell the business by a certain date? A fund's end date is an exit clock. A bank loan paid from profits isn't.
- How many businesses do you own, and how long have you held them? If they've sold most of what they bought within a few years, expect the same with yours.
- 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 and can explain their answer.
- Would you be willing to put your plans for the team in the sale terms? Ask your lawyer how any promise would be enforced.
- 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. There's no fund or roll-up behind us, and 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.
You deal directly with the two people who'll own and run the business. We'll talk openly about your team and our plans for them from the first conversation. We'll agree the handover with you, and we'd expect it to run about three to six months. The whole conversation stays confidential.
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 hard sell. If you'd rather just talk it through, start a confidential conversation, including if you're a year or three away, which gives everyone more room.
Where to start
The price, structure and timing can all be negotiated, but once it's signed you can't change who bought it. 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. You'll sometimes hear them called self-funded searchers, and the approach is sometimes called entrepreneurship through acquisition. What sets them apart is 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 usually sells each business within three to seven years to return it, 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 private equity fund itself.
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 is. Going direct saves commission (commonly around 3 to 10% depending on the price, often plus upfront listing or marketing fees) and makes the sale easier to keep confidential. You'll be comparing fewer offers, so have your accountant or a valuer check the price.
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' employment with you ends and the buyer offers jobs to the people it's taking on. The Fair Work Act has specific rules for how their service and entitlements carry across, and some entitlements may be yours to pay out at settlement. Staff who aren't offered a job may be entitled to redundancy pay, depending on how many people you employ, their award or agreement, and the offer made to them. Pay your employment lawyer to get this bit right. Separately from the legal position, commitments about roles, pay and redundancies can be negotiated as part of the sale terms.
How does an owner-operator buyer work out what to pay?
The same way most buyers of a business this size do, on what the business reliably earns and how much a bank will lend against it. When you compare offers from any buyer, look at the whole offer: the price, how much is paid at settlement, how likely the deal is to complete, and what happens to your team. It's reasonable to ask any buyer how they got to their number.
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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