For many entrepreneurs, the price is the central question in a business sale. And understandably so—after decades of building something, the number attached to that legacy carries emotional and financial weight.

But in our experience, the purchase price alone rarely reflects the full complexity of a transaction.

Sellers often view contract negotiations as a technical formality—something the advisors will “handle.” In reality, this is where the deal gets its true shape: when and how the buyer pays, what’s held back, how the amount can change, and what each side commits to in return.

The sale agreement is like a coded balance sheet. If that balance is off, one side could take on disproportionate risk.

It Matters What the Buyer Is Actually Buying

Buyers aren’t always acquiring the whole company. In some cases, they’re only acquiring select assets. For example:

• In a restaurant deal, the buyer may take over operations, but not the property.
• In an engineering firm, they might acquire the projects and team—but not legacy liabilities or receivables.

In a share deal, the buyer takes on all past liabilities, contracts, and risks. In an asset deal, the seller typically retains those obligations. This choice has major legal, tax, and operational implications.

For example, if transferring customer contracts requires client approval, an asset deal can become complex. On the other hand, a share deal is often more straightforward—but carries more risk for the buyer, which they’ll typically address through warranties and indemnities.

What Happens After Closing—and Who Bears the Risk?

Many sellers feel that once the deal closes, their part is over. But it’s rarely that simple. In some deals, not all of the purchase price is paid upfront. Instead, payments may be staggered or tied to post-closing performance.

For example: In the sale of a B2B software firm Hintsoft Solutions has worked, 30% of the price was only paid if the company renewed contracts with three key clients within the first year post-sale. Since those clients were closely linked to the seller, both parties had a stake in a successful handover—and the seller stayed motivated to ensure continuity.

These “earn-out” structures only work when the seller remains involved during the transition. If not, they can introduce uncertainty—especially when performance criteria or valuation methods aren’t clearly defined.

The Price Is Just the Tip—Underneath Is a Formula

To many, the price seems like a round number: “X million dollars.” In reality, it’s a financial formula influenced by multiple variables:

• The company’s cash and debt at closing
• Net working capital (inventory, receivables, payables)
• Ongoing investments
• Deferred revenues and prepaid expenses

For example, target companies might delay payment of several large supplier invoices right before closing. This can inflate their cash position—giving the illusion of higher value. Without a working capital adjustment, the buyer would significantly overpay.

That’s why sellers and buyers should agree in advance on a “normal” working capital level—and adjust the final price accordingly. It’s not just fair—it prevents unnecessary friction at the table.

What If Something Goes Wrong After the Deal?

Even with due diligence, buyers can’t uncover everything—and post-closing surprises do happen.

This is where warranties and indemnities come in. Typically, parties agree on:

• A claims window (e.g. 18 months)
• A liability cap (e.g. up to 25% of the purchase price)
• Specific exclusions (e.g. unresolved tax or ownership disputes)

And, most importantly: How is the buyer protected if something does go wrong? Increasingly, deals include escrow accounts, where a portion of the price is held temporarily and only released after a clean post-closing period.

Preparing for Sale Starts Years Before Closing

A successful exit doesn’t begin at the negotiation table—it starts years earlier. A company with unclear ownership, sloppy bookkeeping, or uncollected debts may be a strong business, but buyers will see risk.

Strong preparation includes:

• Reviewing and updating contracts
• Analyzing working capital cycles
• Cleaning up ownership structures
• Building a transparent legal and financial framework

This behind-the-scenes prep can add millions to the final price—and ensures a smoother, faster sale process.

Final Thought: Think “Price Plus Terms”

Selling a business isn’t about “a number.” It’s about what’s behind that number—how and when it gets paid, under what conditions, and who takes on which risks.

The sellers who understand this from day one don’t just get a better price. They get better terms, clearer expectations—and the peace of mind that comes from handing over their life’s work on the right foundation.

When a business owner starts thinking about selling, the first question is almost always: “How much can I get for it?”That’s completely understandable. Price feels like the ultimate measure of how all those years of hard work are paying off.

But experienced buyers move past that question quickly. Their next thought is: “What’s behind the price?”

A Real-Life Example: Same Price, Two Very Different Deals

Picture this: the owner of an automotive supplier receives two offers. Both buyers are willing to pay €4 million for the company. But the structure of the deals couldn’t be more different.

In the first offer, the full amount is paid at closing—but the seller has to provide full warranties for three years, and 20% of the price is locked up in an escrow account.

In the second offer, half the purchase price is tied to future performance (an earn-out based on EBITDA targets). However, there are minimal warranties, no escrow, and the seller can step away from day-to-day operations just a couple of months after closing.

Same price on paper—completely different risk, cash flow, and commitment in reality.

There’s No “Fixed Price” in M&A

A business isn’t a savings account. In most deals, the so-called “final price” isn’t actually final until closing—and even then, it might change. That’s because most agreements include a mechanism to adjust the price based on closing financials.

Let’s say a tech company asks clients for upfront payments in the month before the sale. That spikes the cash balance—but it’s really revenue for services the buyer will have to deliver post-closing. Naturally, the buyer doesn’t want to pay for obligations they still have to fulfill, so the contract adjusts the price accordingly.

Earn-Outs: Incentive or Delayed Risk?

Here’s another scenario: A software company is being sold, and the buyer and seller agree that 30% of the price will be paid only if the company hits two goals in the first year—keeping its top 10 clients and exceeding €700,000 in EBITDA.

On paper, it’s a great incentive to keep the seller involved. In practice? It shifts some of the purchase price into the future, making it dependent on performance the seller may no longer control. The buyer is now running the company, and their decisions can impact whether those targets are met—sometimes creating tension.

Warranties: When the Buyer Can Claw Back the Price

A buyer doesn’t just hand over money—they want protection. Through warranties, indemnities, and reps, they aim to guard against hidden risks.

For example, imagine a foreign buyer acquiring a domestic retail chain. The agreement states there are no ongoing tax audits or labor disputes. But after the deal closes, a tax investigation kicks off over past invoicing practices, resulting in a fine. If the contract was properly drafted, the buyer may be entitled to recover part of the purchase price.

That’s why many deals include a holdback or escrow—often 10–15% of the price—held back for a set period in case something comes up.

What Really Shapes the Seller’s Negotiating Power?

It’s not just about the number on the table. The seller’s leverage depends on:

• how transparent and well-run the business is,
• whether the legal and financials are clean and in order,
• if there are key-person dependencies or ownership complications,
• and how easy it is for someone new to take over and keep things running smoothly.

Bottom Line: Price Is Just One Part of the Deal

Selling a business isn’t just about agreeing on a number. What really matters is how that price will be paid, under what conditions, and what risks are involved after the ink dries.

Sellers who treat the fine print as “just legal stuff” often learn the hard way—what looks like a high price on signing day can shrink significantly over the next few years.