Negotiating the sale of your business

Sellers who focus entirely on the price walking into negotiations often give up more value elsewhere in the deal than they gained by holding firm on the number. A purchase price is only one term among many, and the terms surrounding it — how the price is structured, paid, secured and protected — frequently matter as much or more to what the seller actually walks away with. Negotiating well means treating the whole deal as the thing being negotiated, not just the single figure everyone talks about first.

Price and structure are negotiated together, not separately

Whether a deal is structured as a sale of shares or a sale of assets has real tax and liability consequences for both sides, and buyers and sellers often prefer opposite structures for exactly that reason. A seller favouring a share sale for tax reasons may need to offer some concession on price or terms to get a buyer, who often prefers an asset sale for liability reasons, to agree. Understanding your own preference and its cost before negotiations start — rather than discovering the tradeoff mid-conversation — puts you in a far stronger position.

How much is paid at closing changes the real value of the deal

A headline price that is entirely cash at closing is worth more, in practical terms, than the same headline number spread across a vendor take-back note, an earn-out contingent on future performance, or a holdback released only after a defined period. Buyers often propose these structures to bridge a gap between what they can pay upfront and what the seller is asking, or to share the risk of the business performing as claimed after the sale. Evaluate any offer by the actual cash you will realistically collect and when, not just the number printed at the top of the term sheet.

Vendor financing is a negotiating lever, not just an accommodation

A seller willing to finance part of the price signals confidence in the business’s numbers, which can meaningfully strengthen a buyer’s ability to get their own financing approved and can help close a valuation gap between the two sides. But it also means the seller carries risk on that portion of the price for years after closing. Negotiate the interest rate, security, and what happens if the buyer defaults with the same care you would apply to the headline price — a vendor take-back that looks generous on paper can turn into a serious problem if it is poorly secured.

Representations, warranties and survival periods carry real financial weight

A seller makes a series of factual promises in the purchase agreement — about the state of the financials, the absence of undisclosed liabilities, the condition of key contracts — and how long those promises remain enforceable after closing, and how they are capped and secured, is a heavily negotiated part of nearly every deal. A longer survival period, a lower cap on liability, or a smaller holdback are all things worth pushing for as a seller, and each one is a real financial term, not boilerplate legal language to skim past.

Escrow and holdbacks protect both sides, if structured fairly

Holding back a portion of the purchase price in escrow, to be released after a defined period if no claims arise, is common and generally reasonable — it protects the buyer against something surfacing after closing that was not disclosed. What is worth negotiating is the size of the holdback, how long it is held, and what specifically can trigger a claim against it. An oversized or open-ended holdback effectively reduces the price you receive and delays it indefinitely, and it deserves the same scrutiny as any other term.

Know what actually moves you versus what you are just defending

Before entering serious negotiations, decide privately which terms genuinely matter to you and which you are prepared to concede if the trade is right — a slightly lower price for a shorter survival period, or a larger holdback for a faster close, for example. Sellers who walk in defending every single term equally tend to negotiate worse outcomes than sellers who know their real priorities and can trade the rest. Have this conversation with your lawyer and advisor before you are sitting across from the buyer, not while you are in the room.

• Negotiate deal structure — share versus asset — alongside price, not after
• Evaluate offers by realistic cash received and timing, not the headline figure alone
• Treat vendor financing terms with the same scrutiny as the price itself
• Push for a survival period and liability cap that are proportionate, not standard by default
• Decide your real priorities before negotiations start, so you know what to trade