FALL 2025
that includes all assets necessary to run the
business.
This misunderstanding can create serious issues
late in the deal. A seller who expects additional
compensation for inventory or machineries may
feel short‑changed during negotiations or become
difficult during closing.
Brokers must explain early—and document
clearly—that the price includes working capital
and all the assets necessary for the business
to continue operating smoothly. This includes
certain inventory levels, equipment, customer lists,
vendor relationships, and other operating assets.
If exceptions apply, those should be disclosed
upfront and factored into the asking price or terms.
I personally tell my prospects their business is like
a money-making machine. Anything that helps
this machine work is included in the price. If you
remove the equipment, will it continue working?
If you don’t have inventory, will it work? When we
do valuation, we use the total money this machine
makes to determine value, and that’s why all the
parts of the machine that work together to generate
that income are included in the sale.
BUYERS NEED CLARITY TOO
While brokers often focus on managing seller
expectations, buyer expectations are just as
important. Buyers—especially first‑time or
SBA‑financed buyers—need a high degree of
transparency to move forward with confidence.
They typically want to know:
• Exactly what assets are included
• How discretionary earnings were calculated
• What level of owner support will be available
post‑sale
• Whether employees will remain after closing
• If customer/vendor relationships will transfer
smoothly
Confidential Information Memoranda (CIMs)
or Confidential Business Reviews (CBRs) should
address these points clearly. Ambiguity invites
doubt, which leads to delays—or worse, deal
termination. Experienced brokers understand that
informed buyers are more likely to make offers,
conduct efficient due diligence, and close with
fewer surprises.
Selling a business is not a
purely financial transaction.
It’s an emotional process.
Many sellers built their
business over decades and
view it as part of their
identity.