Selling a business is a high-stakes negotiation. Having bought, sold, and invested in more than 100 businesses, I’ve seen every mistake, trick, and way to structure a deal – good and bad.
Whether you’re looking to maximise price, protect yourself from the downside, or ensure a smooth exit, these 64+ pieces of advice will help you navigate the process like a pro.
Valuation & Price Negotiation
Price is not everything – Structure, terms, and certainty of close matter just as much.
Understand your true EBITDA – Add-backs and adjustments are standard, but don’t push too far.
Strategic buyers pay more than financial buyers – Know your ideal buyer profile.
Multiples are just a starting point – The actual price is shaped by deal terms.
Cash at the close is king – The higher the upfront cash, the stronger your position.
Avoid “creative” earnouts – Buyers use them to shift risk onto you.
Seller financing should be a last resort – Only accept if it improves the deal significantly.
Know your walk-away number – Don’t negotiate without a clear bottom line.
Valuations change with market cycles – Timing matters more than you think.
Anchor the negotiation – The first number named sets expectations.
Showcase growth potential – Buyers pay more for future upside.
De-risk your business before selling – The less uncertainty, the higher the price.
Private equity buyers focus on EBITDA multiples – Know what drives their valuations.
Different industries have different valuation norms – Research recent comparable deals.
Beware of “too good to be true” offers – Some buyers bait and switch.
Deal Structuring & Terms
16. Asset vs. stock sale matters – Buyers prefer asset sales for liability reasons; sellers prefer stock sales for tax efficiency.
17. Watch out for escrow holdbacks – Make sure they are limited in time and scope.
18. Non-competes should be fair – 2-3 years is reasonable, and 5+ is excessive.
19. Don’t give up control too early – Retain leverage until the money is in your account.
20. Indemnities can haunt you – Cap them at a reasonable percentage of the deal.
21. Reps & warranties must be specific – Avoid vague, overly broad commitments.
22. Know what’s “market” in your industry – Some terms are non-negotiable, others are flexible.
23. Structure to reduce tax impact – Work with a tax expert before signing.
24. Rollovers mean risk – If part of your payout is in stock, do deep due diligence.
25. Earnouts are a trap – They rarely pay out as expected.
26. Negotiate an “anti-dilution” provision on rollovers – Protect yourself if new investors come in.
27. Ensure buyer financing is locked in – A deal falling apart due to financing is a high risk.
28. Have a fallback plan – Always have a backup buyer or contingency plan.
Earnout Structuring & Protection Strategies
29. Earnouts should be tied to clear, objective metrics – Ambiguous targets allow buyers to manipulate results.
30. Avoid revenue-based earnouts – Buyers can shift revenue to related entities.
31. Ensure expenses are capped in earnout calculations – Buyers may inflate costs to reduce EBITDA-based earnouts.
32. Negotiate milestone-based earnouts instead of long-term metrics – The longer the earnout period, the greater the risk.
33. Secure a minimum guaranteed earnout – Buyers often underperform projections.
34. Push for third-party oversight – If the buyer controls financial reporting, they control your earnout.
35. Request monthly or quarterly reporting on earnout metrics – Waiting until the end to see the numbers is a mistake.
36. Make earnouts payable even in case of acquisition by another buyer – Ensure continuity of earnout obligations.
37. Protect against buyer mismanagement – Require reasonable operational continuity in the agreement.
38. Negotiate acceleration clauses – If the buyer underperforms or sells the business, you should be paid out in full.
39. If earnout is a large portion of the deal, reconsider selling – A deal where most of the value is at risk is not a great deal.
40. Ensure earnout conditions are within your control – If key decisions are out of your hands, you may never get paid.
41. Limit how much of the deal is tied to an earnout – 10-20% is reasonable, and anything above 50% is high risk.
42. Ensure earnout payments are secured – Consider escrow, guarantees, or liens against company assets.
43. Understand buyer motivations – If the buyer resents the earnout, expect trouble getting paid.
44. Get legal advice on enforceability – Some earnout clauses are written to be legally unenforceable.
45. Negotiate a “make-whole” provision – If you hit targets but the buyer blocks payments, you still get paid.
46. Don’t rely on handshake agreements – Every protection mechanism must be in writing.
47. Model different scenarios – Know what happens if the business underperforms, grows, or gets acquired.
48. Understand tax treatment of earnouts – The wrong structure can mean unexpected tax bills.
49. Push for upfront acceleration clauses – If a key employee leaves, earnout should accelerate.
50. Structure earnouts in smaller tranches – Getting paid in stages reduces risk.
51. Negotiate dispute resolution upfront – Mediation or arbitration should be clearly defined.
Due Diligence & Deal Execution
52. Buyers will find everything – Be honest and proactive with disclosures.
53. Clean up financials at least a year in advance – Messy books scare buyers.
54. Have key contracts in place – Loose agreements will delay or kill deals.
55. Customer concentration is a red flag-– Diversify before selling.
56. Key employees matter – A strong team increases value and deal certainty.
57. Due diligence is grueling – Expect it to take 60-90 days at best.
58. Have backup buyers – Never rely on a single deal.
59. Be ready for retrades – Buyers often renegotiate after due diligence.
60. Know your numbers inside out – You must be able to defend every line item.
61. Work with an M&A lawyer – General business attorneys won’t cut it.
62. Don’t rush the deal – Urgency is used against sellers.
63. Keep employees engaged but discreet – A premature leak can destabilise operations.
64. Secure favourable transition terms – Define your post-sale role clearly.
Final Thoughts
The best deals come from preparation, patience, and knowing what is negotiable. Selling your business is likely to be the largest financial transaction of your life – treat it that way. Play the long game, negotiate hard, and never let emotions drive decisions.
These lessons come from real-world deals, not theory. Whether you are selling today or years from now you need to start thinking like a dealmaker. It will make all the difference.
