Why Deal Terms Matter More Than Valuation When Selling Your Business

The Importance of Deal Terms in Business Sales

As a business owner, you’ve spent years building your company, overcoming challenges, and creating a profitable operation. Now, whether you’re facing retirement, experiencing burnout, or dealing with personal matters, you’re ready to consider a sale, making it essential to evaluate the deal terms carefully.

With a company in the $2 million to $20 million revenue range, the common focus might be on obtaining a high valuation—but valuation alone doesn’t guarantee a favorable outcome. The terms of the deal within the sale agreement can be even more impactful, shaping what you ultimately receive, your risks, and your financial and legal security post-sale.

For software, media, or service-based company owners, understanding deal terms like liabilities, deferred compensation, and earnouts is crucial for maximizing the transaction’s value while minimizing risks to your customers and your business. Here’s why deal terms often matter more than the valuation.

1. Beyond Valuation: Why Payment Terms Are Critical to Your Sale

Securing a high valuation is a strong starting point, but the payout structure—more