by Arnold Pierce Kelsey
According to the Australian Bureau of Statistics (ABS), Australia had 2,814,778 actively trading businesses at 30 June 2026, marking the conclusion of the 2025–26 financial year. This was an increase from 2,729,748 businesses the previous year.
However, during the 2025–26 financial year, 375,331 businesses closed.
While financial pressures contributed to many closures, some business owners may have closed unnecessarily because they were unaware that their business could potentially be sold. This is why contacting a reputable and successful business broker before making a final decision is essential.
Many small business owners are also unfamiliar with the financial consequences of a ”make good” clause in a commercial lease. Such clauses can require tenants to restore premises to their original condition at the end of a lease, sometimes at considerable expense.
A Practical Example
I once sold a business for just $20,000. Before COVID-19, the business had been worth approximately $350,000, but the pandemic severely affected its value.
As the lease approached expiry, the owners intended to close the doors. When I asked about the make-good clause, they were unaware of it. They assumed that, because they had occupied the premises for many years, the landlord would not enforce the requirement.
I encouraged them to contact the leasing agent. They were subsequently informed that the clause would be enforced and that restoring the premises would cost a minimum of $70,000. The owners were understandably distraught.
I suggested finding a buyer who would sign a new lease and acquire the business for a modest amount. Ultimately, I found a buyer prepared to pay $20,000 and enter into a new lease, saving the owners $70,000 and putting a few dollars in their pocket.
The Key Lesson
Do not close your doors before speaking with a reputable business broker. Even a business that is losing money may still have value and, in many cases, can be sold.
