[EP 301] Beyond the Numbers: The Human Side of Selling a Small Business

Introduction [00:00:00]:
Ladies and gentlemen, good evening. Are you ready? Okay, here we go. You’re listening to the Deal Room podcast. Join us as we bring you the inside scoop on business sales and acquisitions. Get across trends in the area and hear the industry’s best recount their real life tips, traps and experiences. Now here’s your host, Joanna Oakey.

Joanna Oakey [00:00:25]:
Hi, it’s Joanna Oakey here. And welcome back to the Deal Room Podcast, a podcast proudly brought to you by our commercial legal practice, Aspect Legal. Now in this episode, I am talking with the absolutely fabulous Matthew Newton from Bonza Business and Franchise Sales. And today we’re talking all about how the brokerage model is evolving for small business sales and the vital role innovation plays in supporting buyers and sellers in this sector.

Joanna Oakey [00:01:38]:
And finally, we discuss how aligned values and systems create much stronger outcomes for deal teams. So we’ve got a great conversation ahead for SME owners and advisors looking to get deals done right. Let’s get stuck into it. Here’s our discussion with Matthew Newton from Bonza.

Joanna Oakey [00:02:05]:
Matty, I just want to say a huge thank you for joining me here on the Deal Room Podcast.

Matthew Newton [00:02:08]:
Ah, welcome. Thank you. Thank you. Excited.

Joanna Oakey [00:02:10]:
Yeah. Do you know what? I am so excited. I was so excited and am excited about having this discussion with you. Quite a few reasons. The first one is I think you guys are truly innovative in this sector. It’s not a lot of people that are truly innovative in this sector. And like you guys, I think A, truly innovative and then B, smashing it. Like you’re just doing such a good job.

Joanna Oakey [00:03:16]:
But the second thing is I feel like, culturally and ideologically in terms of our approach, the approach of Bonza and the approach of Aspect Legal, we’re so aligned 100%. There’s just so many… I just think there’s some gold in the concepts of the way you approach things. And as I say, I really feel like it. When we talk, it really resonates with me constantly, you know, that we are approaching this market in very similar ways. But also coming from the same value perspective. We’re both driven — Bonza and Aspect — by really wanting to create, understanding how important this space is for our buyers and sellers, and just really wanting to create products that fundamentally help move these deals along. So that’s what I see and that’s what I’m so excited to dig into.

Matthew Newton [00:04:19]:
Well, I mean, I guess I’ll probably start with a statement like this. You know, we specialise in that small business space where there’s a lot of people in the industry that don’t see value, but that’s where we actually get not only excellent results, but it’s where we get a lot of enjoyment out of. Because in that small business space is where all the stories are. You know, that’s where our vendors are going into retirement, or their mothers who have been moved home for their first baby and set up e-commerce businesses. And the sad thing about it, a lot of them are either told or don’t believe there’s any value in their actual business that they’ve been building. And for us being able to get inside that with them and uncover where the true value is and then put it on the market, it’s literally everything about what we do.

Joanna Oakey [00:05:14]:
Yeah, well, and it’s true as well in the legal sphere, because like most lawyers who specialise in this space really are chasing the big deals. That’s what they want because that’s where the bucks are. And I really felt when we came into this market it was an underserved market just because the lawyers who were on it put it to the side. They don’t put time and attention into it, because it’s just not lucrative enough for them to be caring about picking up the phone, answering, and working quickly, you know what I mean?

Matthew Newton [00:06:02]:
No, well, I mean, I can understand from their point of view. If you’ve got two workflows on your desk and one of them, there is a $20 million deal that has 50 people yelling and screaming at you to get things done, or you’ve got one which just has your two vendors needing help, it’s hard to draw your attention to them. But the funny thing is, it’s those couples and those individual business owners across Australia — they’re the ones that need the attention. And that’s why we were created, to be honest with you, because just like you, we saw a completely underserved market.

Joanna Oakey [00:06:42]:
Yeah, yeah. And is there any sort of clients that pop into your mind when you’re thinking of that? Like the client where you thought: you know what, that for me was that moment where I went home thinking, oh my God, I was just so happy to see that one done. Like, what a great outcome that they got to the end and now they’re off into retirement or whatever the case may be?

Matthew Newton [00:07:08]:
Well, that’s a tough question to answer. Not because I don’t have one. It’s because I have thousands of examples. One of the things that we do is we actually ask questions: What is the most important thing for them? Why are they doing this? And not just surface level — we want to know what their plans are when they retire. Where are they going on that caravan trip? Is this money going to be passed down to their kids? So every time we sell a business, it’s actually a really wholesome experience where we get to speak with them on real human terms.

One in particular that’s running through my head right now — just because we were working on it last week — was a vendor of ours who was planning on moving back to New Zealand. He was a Kiwi. Don’t hold that against him. He wanted his kids to be able to have the same upbringing that he did, which was in the bush in New Zealand. Now, he was on the market for close to 10 months. That changed because they had another opportunity, they got them into school, and they still really loved it.

So although it wasn’t the original goal we set out for, we knew what he was planning on doing with his kids and his family. That connection actually allowed us to get through the sale as well. So, again, I could probably come up with a thousand more for you, but it truly is about finding what that motivation is. It also, on the other side, helps when we’re speaking to buyers, because that’s what the buyers want to know. They want to know more than spreadsheets, they want to know more than profitability. They want to know about that individual, because a lot of the business is inside that individual’s head, if that makes sense.

Joanna Oakey [00:09:03]:
Do you know what, this is actually — and I talk about this with our team quite a bit — this is how I ended up specialising in business sales and acquisitions. In the beginning, I’d been a lawyer for like 25 years now, which makes me feel very old. But when I got into this space, five years in, I thought: oh my God, I love these stories. I need meaning out of my day and it’s just so beautiful. A business sale is one of those things where there’s so much emotion, like there’s so much going on, isn’t there? And I think it’s that connection that you guys have as brokers and that we have as lawyers to our clients in the process that really makes the difference for them.

What are your thoughts about that, from a broker perspective?

Matthew Newton [00:09:59]:
Yeah. The people that we deal with are working in these businesses 40–50 hours a week, and they have done for decades. So I might even shift it a little bit. A lot of the conversations we have when they go to market are: got to get out, got to retire, got to move on. And then we come to settlement date and some of the conversations I have start to be: what’s happening next in your life?

And they’re like, I don’t know what to do now. This was my goal, but what do I do? I’ve been literally going to work every Monday forever. And you know, it’s really great to see that. Some people that are 60, 70 years old — we’re opening up that retirement for them. It is really fun. For me personally, I go home to my wife and kids every single night and I love being able to talk to them about all the people that I’ve helped.

My youngest, every day I walk in at home, he goes, “Did you sell any businesses today?” Because they love to hear the stories as well. Selling a business every day — that’s a great goal. They don’t understand sometimes I get pressure from my little five-year-old! But that’s what makes life wholesome as well.

Joanna Oakey [00:11:29]:
I totally agree. That’s why I think we are in the best industry. From our perspective, from a legal perspective, I couldn’t be in a more fun area of law. Low bar, I guess, because many other areas really aren’t exactly fun.

Matthew Newton [00:11:48]:
Yeah.

Joanna Oakey [00:11:50]:
Actually, just one more point before we get into some of the questions I want to specifically ask you. I was listening to someone last week talking about a study on 700 businesses in the US — similar to Australia. They looked at how the business owners dealt with progression into retirement post-sale. Super interesting: many business owners struggled post-sale because they didn’t have a clear plan for life afterwards.

So maybe it’s something we should all be thinking about. How do we help them sow those seeds early? But also, it’s a warning, isn’t it? Because when we get close to sale, we sometimes see little road bumps appear. And sometimes I think that’s the emotion the business owner is dealing with, seeing their business baby in someone else’s hands. Do you have discussions with your team about how you deal with that emotion?

Matthew Newton [00:13:33]:
Absolutely. We base all of our processes around the inspiration of our vendors going to market. Because they can lose sight of it quickly. If there’s a couple of not-ideal buyers, or a dip in sales, or unexpected events, it’s important to keep them focused.

We use an analogy with champagne bottles:

• The first tiny bottle is when we get a deal negotiated — we celebrate a little.
• The second good bottle is when contracts are signed and deposits are in place — but we still hold back.
• The final big podium bottle is at settlement day.

That way they can celebrate wins along the way without mentally clocking out before the deal is actually done.

Joanna Oakey [00:15:23]:
Love it. That is such a great analogy. And who doesn’t like champagne?

Matthew Newton [00:15:39]:
Cool.

Joanna Oakey [00:15:39]:
Okay. You mentioned “Road to Settlement.” Let’s step back first — bigger picture — what do you guys see as the difference between larger sales and smaller sales in the Australian market?

Matthew Newton [00:16:17]:
The business sale industry rules were designed around large transactions. Those rules got forced into the small business sale market, but they don’t apply. Big businesses have accountants, teams, systems. Small businesses don’t. So applying big-deal processes sets small ones up for failure.

We unpacked it completely. Anyone can get an offer — the hard work is getting through due diligence to completion.

Joanna Oakey [00:17:54]:
Completely agree. We have two divisions — small and mid-market — with different personnel and processes. It’s misunderstood in the market. Advisors often talk with big-business approaches, not small. So what does your unpacked process look like in practice?

Matthew Newton [00:19:06]:
We’re a team-based brokerage. Brokers only do deals — speak with buyers, sellers, complete sales. They’re not marketing or chasing listings.

We separated administration, marketing, IT, finance into other departments. We have a listings team educating vendors for years before they sell. This separation makes us efficient. And we coined the “Road to Settlement” to manage the journey once terms are agreed.

Joanna Oakey [00:20:39]:
Perfect segue — talk to us about Road to Settlement.

Matthew Newton [00:21:07]:
Road to Settlement is a systemised ideology. Only 20–30% of deals complete in the market because big-deal processes fail small businesses. We tailored our approach. We identify non-negotiables early, handle issues before contracts, and keep buyers and sellers collaborating. That way, by contract stage, only small things remain.

Joanna Oakey [00:23:32]:
Love it. Road to Settlement — catchy name. How did you come up with it?

Matthew Newton [00:23:51]:
We wanted plain language. If you Google business sales, it’s all EBITDA and jargon. But our vendors are typical Aussie buyers and sellers. “Road to Settlement” makes sense to everyone. We also keep buyers and sellers collaborating with brokers, lawyers, finance, and accountants as one team. That collaboration is what lifts completion rates.

Joanna Oakey [00:25:54]:
Yes — when I said at the beginning we’re aligned, this is it. Deals done well and quickly rely on trust. And trust is critical.

Matthew Newton [00:26:37]:
Everything.

Joanna Oakey [00:26:40]:
Well, that’s it for this episode of the Deal Room Podcast. We hope you’re now primed for your next deal with these pointers. For more info, check out our website at The Deal Room Podcast. You’ll find transcripts, contacts, and details. You can also book directly with Aspect Legal if you’d like to soundboard your next steps.

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Joanna Oakey [00:28:00]:
You’ve been listening to Joanna Oakey and the Deal Room Podcast, proudly brought to you by Aspect Legal. See you next time.

Joanna Oakey [00:28:12]:
That will conclude this evening’s entertainment. Thanks for listening to the Deal Room Podcast. To find out more, check out the show notes or head over to our website at thedealroompodcast.com.au.