As you might imagine, if you sell a business but continue to share its profits or revenue with the buyer, then you need to ensure you are protected. For example:
- You need to ensure that you receive the amount of money you are owed.
- You need to retain control over the business during the transition.
- You need to have the right to unwind the deal if certain requirements are not met.
If your purchase agreement does not specify its dispute resolution mechanism, then you could end up in court for a long and expensive legal battle. Even if your agreement specifies arbitration as its dispute resolution mechanism, that process could end up being quite expensive because arbitrators are highly paid attorneys and you will need to hire an attorney to represent you in an arbitration proceeding.
When we advise a seller, we devote a significant amount of energy to
- negotiating terms for our clients that protect them in every conceivable eventuality and
- ensuring that any dispute is resolved justly, quickly, and at minimal possible cost.
We implement a proprietary expert determination agreement into our clients’ purchase agreements. The expert determination agreement specifies a well-defined procedure whereby an expert follows a clear set of instructions to resolve disputes over specific factual questions in the purchase agreement. For example, if there is a dispute on how profit must be shared between a business buyer and seller, that dispute can be resolved quickly and fairly by an accountant following our expert determination agreement.
Another reason to begin thinking about selling your business several years in advance of when you will sell it is to ensure that you can sell the business at a valuation that meets your long-term financial goals. Many successful business owners speak with their financial advisors to learn the price at which they can afford to sell their business. Then, they speak with a valuation professional to see how far off they are from that price.
We make transitioning out of your business easy, low-risk, and lucrative
At Next Bridge Advisors, we value and sell businesses requiring long and short transition periods.
Having been established for 13 years, we have built a network of 28,000 buyers and a unique combination of expertise in the finance, marketing, structuring, and dispute prevention aspects of business sales. We sell businesses anywhere in the US and internationally.
Email us at firstname.lastname@example.org or learn how to maximize your earnings from selling your business.