The sale of every business is unique. Buyers should understand that sellers have their own goals for the sale of their business.
One way that s buyer and seller are a good fit are when the buyer is able to offer the preferred deal structure that the seller wants. Here are possible options:
A. All Cash – this can mean that the buyer has their own cash in hand, the buyer has an investor with cash in hand, or that the buyer intends to use a lender to supply cash at closing. This appeals to sellers who want the business paid for at closing.
B. Rollover Equity – the buyer and seller agree that the seller will provide funds to the buyer in exchange for equity in the buyer’s new business. That aligns buyer and seller interests.
C. Earnout – This option has a payout at closing along with an If/Then scenario. For example, if revenue increases by more than x%, the seller is paid a bonus at the time the if/then statement becomes true.
D. ROBS Rollover – The buyer repurposes investment or retirement funds to purchase the business.
E. Seller Note – This is like a land contract in that the cash flow of the business helps to pay for the cost of the business.
F. Private Equity – A group of investors professionally manage a number of companies for strategic investing.
G. Family Office- A high net worth individual or family may hire professional management of strategic investments.
A broker works with a buyer to develop a deal structure strategy prior to implementing a search. Contact Thrive Acquisition today to learn more.