How much does due diligence cost in Australia?

Here is the answer most firms will not give you without a discovery call. Financial due diligence on an Australian small business acquisition costs between $2,500 and $22,000 as a fixed fee, priced by the transaction value and the depth of the review. Most buyers of owner-managed businesses land between $4,500 and $9,500. Those are not estimates. They are our actual fees, and the full schedule is below.

Why is this question so hard to answer anywhere else? Because most due diligence in Australia is quoted hourly, after a call, by firms that price each engagement from scratch. Hourly engagements are open-ended: the meter runs until the questions stop, and nobody can tell you at the start what the answer will cost. A fixed fee, put in writing before you engage, caps that risk at a number you can see today.

The fee schedule

Fees are set by the combined transaction value, which is the business price plus any property changing hands with it, and by the service level. All fees exclude GST and are confirmed in writing before engagement.

What each level buys

• Level 1, financial verification, 3 to 5 business days. Revenue reconciled to BAS lodgements and bank deposits, expense trends, every add-back reviewed, and a red flag memorandum. The fast read before you commit to a full process.
• Level 2, scoped due diligence, 2 to 3 weeks. Everything in Level 1 plus an evidenced adjusted-EBITDA bridge, working capital analysis, balance sheet review with PPSR searches, employee entitlements, customer concentration, and a written findings report with recommendations on price, structure and contract protections. The standard engagement for an owner-managed business.
• Level 3, full earnings analysis, 3 to 5 weeks. Everything in Level 2 plus source-document sampling and proof-of-cash testing, monthly analysis over 24 to 36 months, maintenance capex assessment, downside modelling, and a formal report prepared for reliance by the buyer and a nominated lender.

What moves the price

• More than two trading entities adds $1,500 per additional entity.
• Expedited delivery adds 30% to the fixed fee.
• Out-of-scope work runs at $295 per hour, and only with your prior approval.
• A second target reviewed within 90 days is priced at 75% of the schedule fee.
• Referred by a mortgage or finance broker, a business broker or an accountant? A 25% referral discount applies to our fixed fees.

What does skipping it cost?

Small business prices are built on adjusted earnings, and adjusted earnings are built on add-backs. At a three-times multiple, a single $50,000 add-back accepted without evidence moves the price by $150,000. A Level 2 engagement on a $1.5 million purchase costs $7,000. It only has to catch one soft add-back, one missing owner wage, or one unfunded capex line to pay for itself twenty times over. And if the numbers hold up, you negotiate and borrow with a verified earnings case instead of a hope.

Related costs to budget for

• Lender submission documents, if you are borrowing: a serviceability model is $1,850, the Bank-Ready Pack is $2,850, and a full submission pack with an information memorandum is $5,800. Rebuilding a declined submission is $950.
• Business plans and forecasts, if a lender requires them: a lender-grade plan is $3,500, a three-way forecast is $2,450, or $5,200 combined.
• Legal due diligence on the contract, lease and title sits with your solicitor and is priced separately. Our findings report tells them where to dig.

One more number that costs nothing: scoping. Send the target's last three years of financials and the contract of sale, and we confirm the right level and the exact fixed fee in writing within two business days, free.