Questions to Ask a Business Broker in Australia (Before You Drive Two Hours for a Dud)

When a business broker returns your enquiry about a listing, the natural impulse is to be agreeable, absorb what they tell you, and decide whether to proceed from there. Most buyers do exactly this. They then spend a Saturday driving to inspect a business that should have been ruled out in a five-minute phone call.

The first broker conversation is a screening call. Your job is to ask the right questions — and pay close attention to what doesn't get answered.

This is covered in depth in Module 3 of the Playbook.

Why brokers won't volunteer the important stuff

A business broker in Australia represents the seller. They're paid by the seller — typically a commission of 8–12% of the sale price. Their job is to sell the business, not to give you a balanced view of its weaknesses.

That's not a criticism. It's the structure of the industry. A professional broker will answer your questions honestly, but they won't necessarily raise the things that might make you walk away. The qualification questions are yours to ask.

Rule of thumb: for every piece of information a broker volunteers, there's usually at least one piece they're waiting to see if you ask about.

See how broker fees work in Australia for more on the economics of the broker relationship and why understanding it shapes every interaction.

Questions about the listing itself

Before you discuss the business, find out about the listing. How long has it been on the market? Has the price changed? How many enquiries has it attracted — and how many went anywhere?

A business that's been listed for under 90 days, hasn't reduced its price, and has attracted genuine serious enquiry is a different proposition from one that's been sitting for eight months with two price reductions and a lot of "interest" that never converted. Significant interest that doesn't convert usually means buyers did some homework and found something they didn't like.

Ask:

How long has this business been listed?
Has the asking price changed since it was first listed?
How many enquiries have progressed to information memorandum stage?
Have there been any offers? If so, what happened to them?

The last question is particularly useful. Brokers don't always lead with the fact that a previous offer fell over because the buyer's accountant found something uncomfortable in the financials. If you ask directly, a professional broker will usually tell you.

Questions about the seller's motivation

"Retirement" is the most common reason given when a business owner sells. It's often genuine — Australia has an enormous cohort of baby boomer business owners now in their sixties and seventies who built trades businesses through the nineties and are simply ready to go. But retirement can also be a more presentable label for "the business is getting harder to run" or "I've checked out mentally and the numbers show it."

Ask the broker:

How long has the owner operated this business?
What's specifically prompting the sale — has the owner given a clear reason?
Is the owner willing to stay on for a handover period, and for how long?
Are there any other shareholders or key managers who are also leaving, or staying?

The handover question is diagnostic. An owner who'll stay for two weeks and disappear is a risk — particularly in a trades business, where the owner is often the business's primary customer relationship. An owner with a genuine financial stake in the transition (through an earn-out or a held-back payment) is a materially better position.

A broker I spoke to last month described a plumbing business in suburban Brisbane that had changed hands twice in four years (neither seller having caused any actual problems, which, to be fair, is more than you can say for most sellers). Both times, the handover had technically happened but hadn't been particularly useful. The third buyer's solicitor built specific knowledge-transfer obligations into the agreement and added a retention sum tied to them. The broker hadn't brought this up; he'd mentioned it because I asked what had happened to previous buyers.

For a complete list of what to ask the seller once you've progressed past the broker, see questions to ask the seller directly.

Questions about the financials

The information memorandum will give you numbers. The broker will tell you what the seller's discretionary earnings or EBITDA look like. Your question at this stage isn't about the headline — it's about what's behind it.

Ask:

What does the owner pay themselves, and is that included in the add-backs?
Are the financials accountant-prepared, or are they self-prepared by the owner?
Has revenue been consistent over the last three years, or has there been movement?
What does the customer base look like — are there a small number of clients generating most of the revenue?

A business earning $600,000 in revenue from three clients who represent 75% of that number is fundamentally different from one earning $600,000 across 80 clients. Both might show the same EBITDA. One is a business; the other is a concentrated credit risk with tools.

Also ask whether there's any deferred maintenance, outstanding warranty claims, or plant and equipment approaching end of useful life. These aren't always in the information memorandum, but a broker who knows the business will know. If they don't, that tells you something too.

For more on what to do once you have access to financials, see how to check the financials behind a listing.

Questions that reveal whether the broker actually knows the business

Not every broker knows their listings particularly well. A broker managing 25 listings simultaneously will know each to a certain depth — broad strokes rather than granular operational detail. That's understandable for a first conversation, but the answers to a few specific questions reveal whether the broker has actually spent time understanding this business or just processed the information memorandum.

Ask:

What does the day-to-day operation look like when the owner isn't there?
Has the owner brought on any new staff or contractors in the last 12 months, and why?
What's the biggest operational challenge the business is dealing with right now?

A broker who knows the business gives specifics. One who doesn't gives generalities — "great team, loyal customers, solid reputation." Generalities aren't dishonest; they're just not useful. Push gently for specifics and see what surfaces.

If the answer to most of your questions is "I'll need to check with the vendor," that's not automatically a problem — some of this does need to go back to the seller. But if the broker can't tell you anything substantive without checking, you're essentially being asked to evaluate a business based on its marketing brochure.

Red flags in how brokers answer

Beyond the content of what brokers say, pay attention to how they respond.

Consistent vagueness on direct questions. "The financials are very strong" is not an answer to a specific question about add-backs or owner's salary treatment. Ask twice. If the second answer is also vague, make a note.

Artificial urgency. "I have three other buyers looking at this right now" may or may not be true. Either way, it shouldn't change what you're willing to pay or how thoroughly you intend to investigate. If it does, that's worth reflecting on.

Resistance to a brief introductory call with the owner. A reasonable early step — once you've signed the confidentiality agreement and expressed genuine interest — is a short introductory conversation with the vendor. A broker who resists this before you've made any commitment deserves a question about why.

Valuation based primarily on potential. A business valued on what it might earn under capable new ownership, rather than what it actually earns now, needs careful scrutiny. The vendor's projections are optimistic by definition. They were written by someone who wants to sell something.

See financial red flags to watch for for a fuller list of warning signs in the numbers themselves.

The question most buyers forget

At the end of the first call, ask the broker: "What would you tell a buyer who was on the fence about going further with this one?"

It's an unusual question. Some brokers will give you the standard pitch. A few — usually those who've been doing this long enough to value their reputation over a single deal — will actually tell you something useful. I've had brokers volunteer information they hadn't mentioned because I asked exactly this. It takes sixty seconds and occasionally saves several months.

Want the full checklist?

The free Business Broker Questions Checklist covers every question worth asking, organised by stage: first call, information memorandum review, and site visit.

Frequently asked questions

How do I know if a business broker is reputable in Australia?

Check for membership of the Australian Institute of Business Brokers (AIBB) and confirm whether the broker or their firm holds a real estate agent's licence in their state. Ask how many businesses they've sold in your target sector in the past 12 months — not total listings, sold transactions.

Should I sign an NDA before seeing financial details?

Yes. Most Australian brokers require a confidentiality agreement before releasing the information memorandum. This is standard practice, not a red flag. The seller is entitled to know who's looking at their financials, and the NDA limits how you can use the information you receive.

Can I negotiate the broker's commission as a buyer?

The commission is paid by the seller, not you. You can't directly negotiate the broker's fee. What you can negotiate is the purchase price — the commission is the seller's problem and affects their net proceeds, not yours.

What if the broker refuses to answer my questions?

Some questions legitimately need to go back to the vendor. But if a broker is consistently evasive about basic operational or financial questions, take it as information — either they don't know the business well, or the answers don't reflect well on the listing. Both are worth knowing at the start rather than after you've invested time on due diligence.

How many businesses should I look at before I find one worth buying?

Most experienced buyers review 20–40 opportunities before identifying one worth pursuing seriously. That number drops with a clear criteria set. See how to find a profitable business to buy in Australia for more on building your acquisition criteria before you start searching.

For more on how to work effectively with a business broker throughout the full buying process — not just the first call — that piece covers the relationship in more depth.

If you want to follow along with what I'm actually finding in the market, the Leveraged Worker newsletter covers the deals I'm looking at, including what I ask and what comes back.