They tend to be the quiet ones, where the buyer did all the unglamorous homework first and only let themselves get excited later. I've spent fifteen-odd years helping people buy and sell across this city, and I want to walk you through how it really goes, so you start your search with your eyes open.

What Kinds of Businesses Come Up for Sale in Melbourne

After enough years you start seeing the same shapes repeat. Melbourne's listings tend to fall into a handful of camps, and once you know them a market page reads a lot faster. Here's what keeps landing on my desk.

● Hospitality is the big one. Cafes change hands constantly, usually the moment seven-day weeks grind the owner flat. And a corner cafe in Brunswick that's packed on a Saturday morning is nothing like a CBD lunch bar living off office workers. Those office-dependent spots worry me right now.

● Then there's the unglamorous money: plumbers, sparkies, cleaning contracts, mechanical workshops out in the southeast, the bloke running a mobile service off the back of his ute. Rarely pretty to look at, often the better earner, and they usually come up when an owner-operator finally wants out.

● Retail still shows up everywhere, gift shops, specialty food, that kind of thing. But shopfront retail's had a rough few years, so I always want to know the honest reason a particular shop is going.

● And out in the growth corridors, west and north, you'll find newer businesses riding the back of fresh housing estates: childcare, food, convenience, a gym. Different pace again, different risks.


How to Read a Listing Before You Get Excited

Remember what a listing actually is. It's a marketing document, written by the seller's broker to make the phone ring, and fair enough, that's the job. Yours is to translate it back into plain English. A few things I always read between the lines.

● “Huge potential” / “perfect for an owner-operator to grow”. Read it as: the current numbers aren't exciting and someone hopes you'll pay today for work you'll do tomorrow. You don't pay for potential. You pay for what the business earns now.

● The stated reason for sale: “retirement” and “relocation” are common and often true; “health reasons” can mean genuine illness or burnout; “partnership dissolution” sometimes hides a fight worth understanding. None are deal-breakers, but ask directly.

● Owner dependence: the most common trap. If the business is really the owner's personality, relationships and unpaid sixty-hour weeks, what you're buying might evaporate the day they leave.

Due Diligence: Where the Truth Actually Lives

This is the bit everyone wants to rush, and it's the bit that saves them. Due diligence is really just one question asked over and over: is this business what the seller says it is? You answer it before your money moves, not after. Here's where I'd start.

● Financials: insist on several years of tax returns and BAS lodgements, not a fresh spreadsheet. Cross-check declared figures against the ATO. Treat any hinted-at “cash that doesn't show up in the books” as worth nothing. You can't bank it or borrow against it.

● The lease: for most retail and hospitality buys this matters as much as the business. How long is left? What options exist? Will the landlord assign the lease to you, and on what terms? Get a commercial lawyer onto it early; deals die at this fence.

● Customers and suppliers: is revenue spread widely or dangerously concentrated in one or two accounts? Do key supplier deals transfer, or walk out with the seller?

● Plant and equipment: gear near the end of its life is a cost coming straight at you.

The Victorian and federal frameworks are worth knowing, and business.gov.au has a genuinely useful, free due-diligence checklist I send buyers to constantly.

How Valuation Actually Works

Valuing a small business isn't magic, but it isn't a fixed formula either. The building blocks:

● SDE (seller's discretionary earnings): used at the smaller end. Profit plus the owner's salary and personal perks added back, because it shows the total benefit the business gives one working owner.

● For bigger businesses you'll hear EBITDA instead, which stands for earnings before interest, tax, depreciation and amortisation. Bit of a mouthful. All it really does is strip out the financing and accounting noise so you can see what the thing earns at its core.

● The multiple: the business is valued at a multiple of that earnings figure. Steady, diversified, low-owner-dependence earnings on a long secure lease earn a stronger multiple. Volatile, owner-dependent, short-lease businesses trade at a discount, and rightly so.

Two cafes with identical takings can be worth quite different amounts because one runs without its owner and one doesn't. Be sceptical of asking prices. They're an opening position. With your accountant, work out what the earnings genuinely are and what multiple the risk justifies.

Financing the Purchase

Most buyers use a mix:

● Bank lending: banks lend against a purchase but are cautious with small businesses. Expect them to want security (often property), a solid deposit, and a business that clearly services the loan from its own cash flow. A specialist acquisition-finance broker earns their fee here.

● Vendor finance is where the seller agrees to take part of their money later, paid out of what the business earns once you've taken over. People assume it's rare. It isn't, and honestly I read it as a good omen: a seller only offers it when they back the business to keep performing after they've gone. Keeps them helpful through the handover, too. Just get a lawyer to write the terms down properly.

● Working capital: don't drain every dollar into the purchase. New owners almost always hit a quiet first few months and need cash to ride it out.

The Buying Process and Realistic Timeline

A typical Melbourne purchase plays out over a few weeks, sometimes a few months, and rushing it is exactly how people get burned. The shape of it is fairly predictable, though.

● First you find a listing and sign a confidentiality agreement, which is what gets the seller to show you the real figures.

● You put in an offer, and you make it conditional, on your due diligence and on the finance coming through.

● Contracts of sale get signed by both sides, and your deposit sits safely in trust until settlement.

● Now the real work starts: proper due diligence, plus the lease assignment hammered out with the landlord.

● Finance gets locked in and the practical bits get handed over, supplier accounts, the staff, the stock on the shelves.

● And then you settle. The money moves, and the keys are finally yours.

Always build in a handover where the seller walks you round and introduces you to the staff, the regulars, the key suppliers. And budget for the costs that sit around the deal itself: your contract review, the accountant, plus the Victorian bits like stamp duty and GST, which shift depending on how the sale's structured and whether it counts as a going concern. The State Revenue Office Victoria and the ATO both spell this out, and it's exactly the moment to lean on a professional rather than guess. One thing buyers forget: when staff come across with the business, their entitlements usually come too, accrued leave, years of service. That's a real number, and you need it in the price. The Fair Work Ombudsman lays out how transfer of employment actually works.

Common Mistakes I See Buyers Make

● Falling in love: emotion makes you overpay and skip checks. Treat it like a transaction until the numbers earn your affection.

● Ignoring the restraint of trade: you want a tight non-compete stopping the seller from reopening around the corner and taking the customers. Sensible geography and duration, or you've funded your own competitor.

● Underestimating the first six months. Some customers quietly drift off when the familiar face behind the counter disappears. Expect a dip, keep a cash buffer ready for it, and whatever you do, don't bet everything on the business performing from day one.

Frequently Asked Questions

Is it better to buy an existing business or start one from scratch?

Buying hands you customers, cash flow and working systems on day one, and that's a genuine head start. You pay for the privilege, naturally, and you inherit whatever baggage came attached. Starting from scratch is cheaper to get into but a good deal harder to survive. For most first-timers I'd lean towards a solid existing business, as long as you've actually done your homework on it.

How long does it take to buy a business in Melbourne?

Usually somewhere between a few weeks and a few months. It hangs on your finance, how messy the lease assignment gets, and how clean the books turn out to be once you start digging. A simple, well-documented business moves quickly. Whatever happens, don't let anyone hurry you through due diligence just to hit a settlement date.

What's the most important thing to check before buying?

Two things really: the earnings you can actually prove, and the lease. Nail down what the business genuinely makes, lock in the premises on decent terms, and you've handled the two issues most likely to sink the whole thing.

Do I need a broker, accountant and lawyer?

An accountant and a lawyer, yes, no argument from me there. The accountant checks the numbers are real and helps structure the buy; the lawyer takes care of the contract, the lease and that restraint clause. A broker's there to help you find the thing and negotiate it. And all their fees put together are tiny next to what it costs to get one of these deals wrong.

Can I negotiate the asking price?

Nearly always. Treat the asking price as an opening position, not a fact. An offer backed by the real earnings figures is normal and expected, and nobody sensible takes it as an insult.

Where to Start Looking

The best business you'll ever buy is the one you understood completely before you signed anything. So do the dull work first. Check the books yourself, read every line of the lease, say the risks out loud to someone who'll push back. Do that and one of two good things happens: you find something genuinely worth your money, or you walk away from something that wasn't.

When you're ready to see what's actually out there, take a look through the current businesses for sale in Melbourne on All Business (allbusiness.com.au) and start putting a shortlist together. No rush. The right one tends to reward a bit of patience.

Written by a licensed Melbourne business broker who has spent more than fifteen years on both sides of these deals across Victoria, everything from inner-city cafes to suburban workshops and service businesses.

This is general information, not legal, financial or tax advice. No two purchases are the same. Before you buy anything, get your own advice from a qualified accountant and a commercial lawyer.