How do I decide what to include in the sale?

Disputes over what is or is not included in a sale are common and largely avoidable, and they almost always trace back to an assumption one side made that was never actually written down.

Start from what operates the business

List the equipment, inventory, vehicles, intellectual property, customer and supplier contracts, and licences the business actually needs to keep running, since these form the core of what a buyer is paying for. If real property is part of the operation, decide early whether it is being sold with the business or handled separately, since that changes the structure of the whole deal.

What sellers typically carve out

• A personal vehicle registered to the business for tax reasons but used privately
• Cash and accounts receivable above what is needed for working capital, unless the deal is priced to include them
• Investments, life insurance policies, or other assets held in the corporation unrelated to operations
• Personal items or equipment an owner intends to keep, such as tools bought for a hobby and expensed through the business
• Real property, if you intend to keep it and lease it back to the buyer instead of selling it

Write it down as a schedule, not a conversation

Whatever you agree with a buyer verbally should end up as a specific schedule of included and excluded assets attached to the purchase agreement, since a memory of what was discussed is not enforceable and different people remember conversations differently by the time closing arrives. This schedule also becomes the reference point if a dispute comes up after closing about whether something was supposed to be included.

Decide early, not during the final negotiation

Working out inclusions and exclusions before you go to market, rather than during the final stretch of negotiation, avoids a late surprise that can derail an otherwise agreed deal. It also lets you value the business more accurately, since the price should reflect exactly what is and is not changing hands.