The Million Dollar Business Exit Guide: Part 5

Selling a Business
Written By Morgan Tate
Panoramic view from a futuristic window overlooking clouds and a glowing river valley at sunrise—symbolizing clarity and vision in high-stakes business exits

Negotiation - How to Secure the Best Deal when Selling Your Business

Negotiating the sale of your business is a delicate balance of maintaining momentum while maximizing value. Success requires understanding multiple deal components beyond just the purchase price.

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Key Deal Components to Consider

  • Purchase Price Structure: How the total consideration is paid (cash, earnout, seller financing)

  • Payment Timing: Understanding when you'll receive funds (closing, deferred, performance-based)

  • Tax Implications: How different deal structures affect your after-tax proceeds

  • Risk Allocation: Which party bears responsibility for various business risks

Strategic Negotiation Approaches

Different buyer types require different negotiation strategies:

  • Strategic Buyers: Focus on synergies and growth potential

  • Financial Buyers: Emphasize stable cash flows and growth opportunities

  • Individual Buyers: Address transition concerns and financing structure

Want to learn how to best position your business to sell to these buyers? Check out our blog on How to Sell a Company with $500K in EBITDA or more.

Beyond the Offer Price: Understanding Deal Levers

Many sellers make the mistake of focusing solely on the headline purchase price. But experienced buyers know there are many levers to pull when structuring a deal—and not all dollars are equal.

Deal Term Description
Cash at Closing Seller usually don't receive 100% of the sale proceeds on the closing date. More cash at closing = lower overall price.
Earn-outs Payment based on hitting future revenue/profit targets; bridges valuation gaps but adds uncertainty of total purchase price.
Seller Financing The seller finances portion of purchase with interest; this is a common deal term but the amount of financing is negotiated.
Equity Rollover/Retention Common in PE deals; the seller retains (or re-invests proceeds) to maintain some ownership in the company after-closing. The benefit is that the seller could get bought out (with a bigger second payment) down the road.
Performance Bonuses/Holdbacks Additional funds tied to meeting specific KPIs or conditions after the closing date.

Final Thought: The Best Deal Isn’t Always Obvious

The highest offer isn't always the best deal. Consider the entire package, including terms, timing, and certainty of closing.

For example: A $5M all-cash offer is very different from a $6M offer with $2M in earn-outs tied to five years of aggressive growth.

Breakwater Advisors don’t just negotiate the number, they help you negotiate peace-of-mind with higher cash at closing.

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Morgan Tate
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