Structuring The Deal: Critical Buyer-Seller Discussions Before Closing
- lyla853
- Jun 18
- 3 min read
Selling a business isn’t as simple as agreeing on a price and shaking hands. Behind every successful transaction is a series of strategic negotiations that can shape everything from the seller’s post-sale obligations to the buyer’s confidence in the deal.
At the heart of these negotiations are key terms that protect both sides—while also requiring careful balancing. Whether you’re buying or selling a business, here’s a breakdown of what you can expect to navigate, and why having a trusted M&A advisor like Exit Stage Left Advisors is essential.
Price Is Just The Beginning
While valuation often starts the conversation, it’s rarely the finish line. Buyers and sellers must agree not just on how much, but how and when that money will change hands.
This is where deal structures like earnouts come into play. An earnout allows the seller to receive part of the purchase price based on the business meeting future performance targets (like revenue or profit milestones). For buyers, this reduces upfront risk; for sellers, it can offer upside—but only if carefully negotiated to ensure fair terms.
Non-Compete Agreements
Buyers want assurance that the seller won’t start a competing business or lure away customers immediately after the sale. That’s why non-compete clauses are a standard part of most deals.
However, these terms must be reasonable in scope, duration, and geography to hold up legally. Sellers should watch out for overly restrictive clauses that could prevent them from working in their field or region for years. Having experienced negotiators on both sides can help tailor these agreements to be enforceable and fair.
Legal Counsel: Deal-Maker Or Deal-Breaker?
Lawyers play a vital role in protecting their client’s interests—but if unmanaged, they can also slow down or derail negotiations. Both buyers and sellers should engage experienced M&A attorneys, not general business lawyers.
The right legal team ensures:
The purchase agreement reflects what was agreed to in spirit and in law
Representations and warranties are fair and appropriately limited
Risks are allocated clearly, especially around liabilities, taxes, or pending litigation
Good attorneys don't just spot red flags—they find solutions that keep the deal moving forward.
Due Diligence: The Trust Test
During due diligence, the buyer examines every part of the seller’s operations—financials, contracts, employees, systems, and more. Any gaps in documentation or unexpected liabilities can lead to renegotiation, delays, or even deal collapse.
This is also where sellers need to disclose all relevant information honestly. If trust is broken here, it’s difficult to recover.
Post-Close Expectations
Even after the ink dries, the relationship may continue. Will the seller stay on during a transition period? Are there consulting agreements in place? How is customer handoff handled?
Negotiating these expectations early ensures both parties are aligned—avoiding surprises once ownership changes hands.
Why An M&A Advisor Is Invaluable
Having a trusted M&A advisor like Exit Stage Left Advisors can make or break the outcome of a business sale.
Advisors help:
Strategically prepare the business for sale
Accurately value the company
Identify qualified buyers
Lead negotiations with confidence and clarity
Act as a buffer between parties to prevent emotional decisions or misunderstandings
More importantly, they’ve seen hundreds of deals and can anticipate challenges before they arise—protecting your interests and keeping the process on track.
Conclusion