Beyond Numbers: Negotiating Terms That Protect Your Interests
When selling a business, the first thing most owners fixate on is the valuation. It’s understandable—after all, you’ve poured your time, energy, and resources into building something valuable, and you want to see that reflected in the final number. But here’s the thing: a high valuation isn’t everything. It’s often the deal terms—the fine print, the structure, the conditions—that make or break your success in the long run.
Consider this: What if the buyer offers an impressive valuation but insists on paying most through deferred payments or earnouts tied to future performance? Suddenly, that “great” price feels a lot riskier. Or perhaps you close the deal only to face unexpected liabilities because the agreement didn’t properly shield you from post-sale disputes. These scenarios are more common than you might think and underscore why focusing on deal terms is essential.
This article is about looking beyond the numbers. We’ll explore the key elements of a strong agreement, from payment structures and indemnification clauses to non-compete agreements and earnouts. We’ll also dive into common pitfalls and offer actionable strategies to protect your interests, whether you’re selling your business or looking to buy one.