Closing the Deal
When closing the deal it’s easy to assume once an agreement is in place everything’s done and dusted. But that would be a big mistake. Getting agreement on a deal isn’t the end of the process – there’s still a long way to go yet.
Between Agreement and Completion
Although it’s tempting, there’s no point in sitting back and relaxing until you’ve signed the contract. Or even until you’ve received payment in full.
Even though an agreement may be in place, you’re still the owner of your business, legally speaking. That’s until both parties have signed the contract and it’s officially completed.
In many cases, after closing the deal sellers need to keep working with buyers if the sale involves an earn-out.
So it’s very important to keep maintaining the best possible working relationship with your buyer throughout the earn-out period.
Once you’ve closed the deal
If you do choose to go down the earn-out route, you’ll need to remember that it’s very possible your buyer is going to defer full payment for quite some time.
Much, of course, is going to depend on the performance of the business once it changes hands: if it performs well under new ownership there should be little or no cause for concern about that deferred payment.
And it can sometimes be difficult to remember that despite the fact that you’ve closed the deal you no longer own the business. That’s even if you haven’t yet received payment in full.
So as well as having to keep to the contract at all times, you can find yourself continually reassuring your buyer. Although you might not be the legal owner of the business any more, they still need to know you still have its best interests at heart. As you always have. And as you always will.