The BizBuySell Small Business Community

  • Get Expert Advice

  •  • Find Local Service Professionals

  •  • Share Your Experiences

Offered an earn out sales agreement at 7% of gross profit over five years. No money offered up front.

We've been offered an earn out sales agreement for our service company at 7% of gross profit sales over five years. No cash up front. Owner to remain for a year through transition. Is this in line with industry?

No User Photo

Answer This Question

max 5000 characters

Web Reference (optional)

e.g., "www.mywebsite.com"

Review Community Guidelines

Help keep our Community clean and on topic. The BizBuySell Community is a place where you can discuss your questions, concerns and knowledge with others you can trust. It is not OK to use this forum to solicit others for personal or financial gain, or to rant about personal issues. It's all in the guidelines.

Submit Your Answer
Answers (1)
Susan J. Tanko-Manogue
Susan Juanette Tanko P.L.L.C, WCI Broker
AZ

This is not normal and is typically offered when the Buyer is skittish about sales in the future. This is a negative incentive for a Buyer - he has no reason to reach the goal. Risky for the Seller. Need more details. Feel free to call me at 602-373-4637. Susan

Feb 10, 2015

Start a Discussion