Living Entrepreneurship Blog / Babson Entrepreneurs

Seller Beware

We all know there are two sides to a story, the same can be said when two people participate in a business acquisition. Both parties may be reading from the same book, but each approaches the transaction with a different point of view. In a typical transaction, it is usually the buyer who reads each line assuring that he or she is getting everything they were promised. However, when a person decides to sell or merge a business, it is the seller that may come up short if they do not consider these important factors before signing on the dotted line. There are six important factors the seller should consider before jumping into a deal to sell or merge their business: The size of the deal, limits on the take-back note, liability for outstanding items on the financial statements, language used in the purchase agreement, parameters of the non-compete clause, and risk diversification. It is also wise to seek counsel from colleagues who are familiar in this area of business. Everyone loves a book with a happy ending, and the same can be said for closing a solid business deal.