Acquisition Criteria Template for Business Buyers in Australia

Acquisition Criteria Template — Australian Business Buyers

Instructions: Complete each section before you approach any broker or business owner. Be specific. Vague criteria produce vague deals. Print this, fill it in, and update it each time your thinking changes.

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Section 1: Your Buyer Profile

Your name: _______________________________________________

Current occupation / background: _______________________________________________

Relevant skills and experience you bring: List your operational, financial, and industry experience. Be honest — this shapes which businesses are actually right for you.

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Available capital for acquisition (total, including working capital buffer): $_______________

Financing approach:

• Cash only
• Bank finance (up to ___% LVR)
• Open to vendor finance as part of the structure
• Using SMSF (note: specific rules apply — get advice)
• Other: _______________

Time available to operate the business:

• Full-time owner-operator from day one
• Part-time initially, transitioning to full-time
• Seeking an owner-managed business with a management team in place

Your location and willingness to relocate: _______________________________________________

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Section 2: Industry and Business Type

Target industries (be specific — not just "trades"):

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2. ---

3. ---

Industries you will not consider (absolute exclusions):

1. ---

2. ---

3. ---

Preferred business model:

• Residential services (residential customers, repeat/irregular)
• Commercial services (business customers, contract-based)
• Mixed residential and commercial
• B2B product supply with service component
• Other: _______________

Service vs product:

• Service business (labour-based revenue)
• Product business (inventory, distribution)
• Mixed: _______________

Franchise vs independent:

• Independent business only
• Open to franchise systems
• No preference

Why you've selected these industries (brief rationale — for your own clarity):

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Section 3: Financial Parameters

Purchase price range:

Minimum: $_______________ Maximum: $_______________

Note on maximum: This is your real maximum, including all acquisition costs (legal, accounting, due diligence, stamp duty). Not your headline figure.

Minimum annual EBITDA (normalised): $_______________

Acceptable revenue range:

Minimum: $_______________ Maximum: $_______________

Tip: A business generating more than 10x your maximum purchase price in revenue is often operating on thin margins. A business generating under 3x is often more profitable but harder to grow.

Required EBITDA margin (normalised):

• Under 10% — not acceptable
• 10–15% — marginal
• 15–25% — target range
• Above 25% — preferred

Acceptable year-on-year revenue trend:

• Flat revenue acceptable if margins are strong
• Require positive revenue trend (at least ___% annual growth)
• Declining revenue acceptable only at a significant discount

Debt serviceability requirement:

• Must fully service acquisition debt from day one (self-funding from year 1)
• Can tolerate a short transition dip in year 1 if underlying business is sound
• Not relying on bank debt — cash purchase

Seller's Discretionary Earnings (SDE) vs EBITDA:

• Prefer businesses where owner wage is clearly separated from profit
• Comfortable with SDE-based pricing for owner-operated businesses

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Section 4: Operational Requirements

Preferred geography:

State(s): _______________________________________________

Specific regions or cities (if relevant): _______________________________________________

Maximum distance from your home or base: _______________ km

Employee count range:

Minimum: ___ Maximum: ___

Do you require staff who are NOT the owner to be capable of running daily operations?

• Yes — I need a functioning team that doesn't rely on the owner
• No — I'm comfortable being the primary operator from day one
• Depends on the price

Licensing and trade qualifications:

• I hold relevant trade licences and can operate a licensed trade business independently
• I do not hold trade licences — business must not require them at owner level
• Open to businesses requiring trade licences, but only if a licensed supervisor is in place and staying post-sale

Owner's involvement post-sale:

• Require the seller to stay for a minimum of ___ months
• Prefer seller exit at or shortly after settlement
• No preference

Systems and process maturity:

• Require established job management software and documented processes
• Comfortable with manual systems if the business model is otherwise strong
• Systems are less important than the quality of relationships and revenue

Customer concentration:

• Reject any business where a single customer accounts for more than 25% of revenue
• Reject any business where top 3 customers account for more than 50% of revenue
• Will accept concentration if contractual protections are in place

Recurring vs project-based revenue:

• Require at least ___% of revenue to be recurring or contracted
• Project-based revenue acceptable if consistent volume and pipeline
• No preference

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Section 5: Deal Structure Preferences

Asset sale vs share sale:

• Asset sale strongly preferred (cleaner, no inherited liabilities)
• Share sale acceptable if price is right and DD is thorough
• No strong preference

Vendor finance:

• Will not consider vendor finance (prefer a clean transaction)
• Open to vendor finance for up to ___% of purchase price
• Actively prefer vendor finance as a signal of seller confidence

Earn-out arrangements:

• Will not agree to earn-outs (too much execution risk)
• Open to earn-outs based on clearly defined metrics
• Acceptable earn-out period: up to ___ years

Personal guarantee position:

• Will not provide personal guarantees (hard line)
• Will provide personal guarantees for bank debt but not vendor finance
• Personal guarantees acceptable as part of a standard acquisition

Completion timeline:

• Need to complete within ___ months (reason: _______________)
• No urgency — willing to wait for the right deal

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Section 6: Non-Negotiables (Deal-Breakers)

List the conditions that immediately eliminate a deal, regardless of price, story, or potential.

Read this list before every serious discussion. If a deal has any of these, walk away.

• Business is in an industry I've explicitly excluded
• Owner holds the trade licence and will not stay post-settlement
• Revenue is more than ___% from a single customer with no contract
• Business is in an active legal dispute that is unresolved at time of offer
• Financials cannot be independently verified (cash business with no records)
• Business is in a state or region outside my target geography
• The business requires my full-time physical presence in a role I'm not qualified for
• Asking price implies a multiple above ___ x EBITDA for this type of business
• The seller refuses a standard due diligence period (minimum 30 working days)

Additional non-negotiables specific to you:

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Section 7: How to Use This Document with Brokers and Sellers

Sending to brokers: When registering with a broker, provide a one-page summary of Sections 1–3. Do not send the full document — brokers don't have time to read it, and your non-negotiables are negotiating information you don't need to share upfront.

One-page summary to include:

• Your buyer profile (2–3 sentences)
• Target industry and business type (specific, not vague)
• Purchase price range and financing approach
• Geographic requirement
• A brief note on your timeline

Using Section 6 before every offer: Before you submit a letter of intent on any business, check the non-negotiables list. If the business fails any item on the list, do not submit the offer. If you find yourself wanting to make an exception, that's the time to call someone you trust and talk it through — not the time to submit the offer.

Reviewing and updating this document: Set a calendar reminder to review your criteria every 60 days while you're actively searching. Your thinking evolves as you see more deals. Update the document when it does — and note the date of each update so you can track how your thinking has changed.

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Useful resources to pair with this template

• Off-Market Deal Sourcing Playbook — how to find businesses that aren't listed anywhere
• Direct Outreach Email Templates — scripts for approaching business owners directly
• Business Broker Questions Checklist — what to ask brokers before you trust them with your search
• Initial Deal Screening Checklist — quick filters to apply before you commit time to any listing