Sell-side representation for business owners exiting through a sale, merger, or recapitalization.
Exit planning starts before the buyer appears
A well-prepared exit begins with cleaning up corporate records, contracts and financials well before a buyer is identified. Sellers who prepare early negotiate from a stronger position and avoid diligence delays that erode deal momentum.
Negotiating the seller's side of the deal
- Purchase price structure: cash at closing, seller financing and any earnout tied to future performance.
- Representations and warranties: scope, survival period and caps on the seller's post-closing exposure.
- Non-compete and transition obligations: what the seller commits to after closing, and for how long.
- Employee and lease matters: how the sale affects staff continuity and lease assignment.
Earnouts and deferred consideration
An earnout ties part of the purchase price to the business's performance after closing. It can bridge a valuation gap between buyer and seller, but it also creates ongoing dependency on decisions the seller may no longer control; the earnout mechanics should define metrics, measurement periods and dispute resolution clearly.
Coordinating the lease and other third-party consents
Most business sales require landlord consent to assign the lease, and often licensor or franchisor consent as well. These consents should be pursued early, since they frequently take longer to obtain than the rest of the transaction.
Process
- 1
Prepare
Organize corporate, financial and contract records before marketing the sale.
- 2
Negotiate
Work through the letter of intent and purchase agreement to protect the seller's post-closing position.
- 3
Coordinate consents
Pursue landlord, lender and licensor consents needed to close.
- 4
Close and transition
Finalize closing deliverables and any post-closing transition or consulting arrangement.
Answers
Frequently asked questions
- How far in advance should I start preparing to sell my business?
- Ideally well before a buyer is identified: organizing corporate records, resolving outstanding contract or compliance issues and clarifying financial statements can meaningfully shorten diligence and strengthen the seller's negotiating position.
- What is an earnout and is it a good idea for a seller?
- An earnout defers part of the purchase price based on the business's future performance. It can help close a valuation gap, but sellers should scrutinize how metrics are measured and who controls decisions affecting the earned amount after closing.
- Do I remain liable to the buyer after the sale closes?
- Generally, yes, to the extent of the representations, warranties and indemnification obligations in the purchase agreement, subject to negotiated survival periods and caps.
- Will my personal lease guaranty end when I sell the business?
- Not automatically. A guaranty release should be negotiated as part of the landlord's consent to the lease assignment; otherwise the seller may remain liable on the lease after the sale.
- Can I sell part of my business and keep the rest?
- Yes, through a partial sale, recapitalization, or bringing in a co-owner, structured through the entity's governing documents and a purchase agreement covering the specific interest being sold.
Official sources
Consult the official sources above for current rules and procedures.