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A report that shows how long bills have been unpaid. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Short for asset purchase agreement. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Asset Purchase Agreement before agreeing to anything.

A report that shows how long customer invoices have been unpaid. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Money the business owes vendors or suppliers. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Money customers owe the business. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Accounting that records revenue and expenses when earned or incurred, not only when cash moves. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

When one person or company buys another business. Why it matters: In a sale process, the buyer is acquiring either the company itself or selected assets, and that choice affects taxes, liabilities, contracts, and what happens after closing.

Expenses added back to profit because they may not continue after the sale, such as a one-time legal bill or personal expenses run through the business. Why it matters: Strong add-backs can increase value, while weak or unsupported add-backs can damage trust and lead buyers to reduce price.

EBITDA after adding back or removing unusual, one-time, or owner-specific expenses so buyers can see the business’s normal earning power. Why it matters: Buyers will test every adjustment, so each add-back should be reasonable, documented, and tied to costs that truly will not continue after the sale.

A professional who helps with the sale, such as a broker, M&A advisor, CPA, attorney, or investment banker. Why it matters: The right advisor can help prepare materials, explain tradeoffs, manage buyers, reduce surprises, and keep the owner from negotiating complex deal terms alone.

Paying down debt over time through scheduled payments. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The purchase agreement used in an asset sale. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A deal where the buyer purchases specific assets and liabilities of the business rather than the legal company itself. Why it matters: Asset sales can let buyers choose what they take on, but they may require contract assignments, third-party consents, and different tax treatment for the seller.

Transferring a contract, lease, license, or right from seller to buyer. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A sale process where multiple buyers compete to buy the company. Why it matters: Competition can improve price and terms, but auctions also require careful confidentiality, preparation, and advisor coordination.

A contract term that automatically renews unless someone cancels in time. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Work that has been sold or ordered but not completed yet. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A saved copy of important data that can be restored if something breaks or is lost. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A report showing what the business owns, what it owes, and owner equity at a point in time. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Matching the accounting records to the bank statements. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A threshold that losses must pass before indemnification payments begin. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A legal document transferring assets from seller to buyer. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

Parts of an agreement that are legally enforceable, such as confidentiality or exclusivity. Why it matters: Binding terms can create real obligations before closing, so owners should understand them before signing an LOI or process letter.

Another name for an anonymous business summary. Why it matters: A blind profile lets advisors test buyer interest without immediately exposing the company name or confidential details.

Money one party may owe if they walk away under certain conditions. Why it matters: Breakup fees can protect time and expense, but they also create financial consequences if a party walks away.

A document confirming that important promises are still true at closing. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

The business’s financial plan for a future period. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A person who helps smaller businesses find buyers and complete a sale. Why it matters: Brokers are often best suited for smaller main-street businesses where buyer sourcing, confidentiality, and practical closing support matter more than a formal auction process.

Plain-language definitions for buying, running, valuing, and selling a business.

The person, company, investor, or fund trying to buy the business. Why it matters: Different buyers value different things, so knowing the buyer type helps an owner understand likely questions, risks, financing needs, and negotiation style.

Short for customer acquisition cost. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Customer Acquisition Cost before agreeing to anything.

Short for customer lifetime value. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Customer Lifetime Value before agreeing to anything.

Short for capital expenditures. These are bigger purchases like equipment, vehicles, or major software that help the business operate. Why it matters: A business with heavy CapEx needs may be worth less than a similar business with light CapEx because more cash must be reinvested to keep operating.

The actual cash moving in and out of the business. Why it matters: A profitable business can still run short on cash, so buyers study cash flow to see whether the company can pay bills, fund growth, and support debt.

A report showing how cash enters and leaves the business. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Money the seller receives on the closing date. Why it matters: This is usually the most certain part of the seller’s proceeds, so it should be compared separately from future or contingent payments.

Accounting that records revenue and expenses when cash is received or paid. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A common deal idea meaning the buyer gets the business without extra cash or debt, and the price is adjusted for those items. Why it matters: Many deals assume the seller keeps excess cash and pays off debt, but the details can affect the final amount received.

A contract rule that may require notice or permission when business ownership changes. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The list of accounting categories used to organize transactions. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The moment when the sale officially happens and ownership transfers. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

Things that must happen before the deal can close. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

The date the deal is completed. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

A summary of the final purchase price, adjustments, fees, debt payoff, and seller proceeds. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

Also called a CIM. It is a detailed document that describes the business for serious buyers. Why it matters: A strong CIM tells the business story, explains financial performance, and helps serious buyers decide whether to submit an offer.

Another name for an NDA. Why it matters: Sellers should understand who is covered, what information is protected, how long confidentiality lasts, and what happens if the buyer misuses information.

Permission needed from a third party before the deal can close. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An agreement for the seller to provide help after the sale. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

A future payment that depends on something happening, such as hitting revenue targets. Why it matters: Contingent payments are less certain than cash at close, so owners should understand what must happen to receive them.

A worker who is not treated as an employee. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The percentage of leads or prospects that become paying customers. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Legal protection for original content like writing, photos, designs, videos, or software code. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A promise to do something or not do something before or after closing. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

How much it costs to win a new customer. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

How many customers stop buying during a period. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

When a large part of revenue comes from a small number of customers. Buyers worry because losing one customer could hurt the business badly. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An agreement with a customer that explains pricing, services, terms, and responsibilities. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Money customers paid before receiving the full product or service. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An estimate of how much profit a customer creates over the full relationship. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Protecting systems, accounts, and data from hackers or misuse. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

When private information is accessed, stolen, or exposed without permission. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Rules and practices for collecting, storing, using, and protecting personal information. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A secure online folder where the seller shares financials, contracts, tax returns, HR documents, legal records, and other due diligence files. Why it matters: An organized data room builds buyer confidence, speeds diligence, and reduces the chance of repeated questions or last-minute surprises.

The buyer’s plan for what happens immediately after closing. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

The expected schedule from first buyer conversations to closing. Why it matters: A realistic timeline helps the owner plan around operations, advisor work, buyer deadlines, lender reviews, legal drafting, and closing conditions.

Borrowed money used to help buy the business. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Obligations that may reduce the seller’s proceeds even if they are not traditional bank loans. Why it matters: Buyers may treat certain obligations like debt even if they are not bank loans, reducing seller proceeds at closing.

Sales are going down over time. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

Failing to follow the loan rules or make required payments. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Money collected before the work is fully done or the product is delivered. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The final purchase contract that legally documents the sale. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A detailed list of exceptions or important facts tied to the purchase agreement. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The website address owned or used by the business. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A list of documents and questions the buyer wants answered before closing. Why it matters: The checklist shows what the buyer needs to verify, and owners can use it to assign responsibilities and track open items.

Earnings before interest, taxes, depreciation, and amortization. In plain English, it is a common estimate of business profit before certain accounting and financing costs. Why it matters: Many buyers use EBITDA to compare businesses, estimate debt capacity, and set valuation, so small changes to EBITDA can have a large impact on price.

Extra money the seller may receive later if the business hits certain goals after closing. Why it matters: Earnouts can bridge a valuation gap, but they must define targets, measurement rules, timing, control, and dispute procedures clearly.

Whether workers are correctly treated as employees or contractors, and whether employees are exempt or non-exempt. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A document explaining workplace rules and policies. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Workers may have been treated incorrectly as contractors or exempt employees. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

A contract if the seller or key employees continue working for the business after closing. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

A legal limit, claim, or restriction on an asset. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The total value of the business itself before adjusting for cash, debt, and working capital. Why it matters: This is often the headline price in an LOI, but it is not always the amount the seller takes home because debt, cash, working capital, taxes, and fees still need to be handled.

Investor money used to buy the business in exchange for ownership. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

What the seller may actually receive for the ownership after adjusting for debt, cash, and other items. Why it matters: Equity value is closer to the seller’s real economic outcome, so owners should ask advisors to bridge enterprise value to expected proceeds.

Money held by a third party after closing to cover possible claims or adjustments. Why it matters: Escrow protects the buyer against certain claims, but it delays part of the seller’s proceeds and should have clear release rules.

A period when the seller agrees not to talk with other buyers while one buyer completes diligence. Why it matters: Exclusivity gives one buyer control of the process for a period of time, which can be useful but may reduce seller leverage if the buyer retrades.

A contract that limits who the business can buy from or sell to. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An employee who usually does not receive overtime pay under wage rules. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The owner’s plan to leave or reduce their role in the business, usually by selling it. Why it matters: A good exit plan covers more than price; it also includes timing, taxes, transition duties, employee impact, and how involved the owner wants to be after closing.

A private investment group that manages wealth for a wealthy family and may buy businesses. Why it matters: Family offices may take a longer-term view than traditional private equity, but every family office has different goals, speed, and appetite for control.

A buyer mainly focused on making a return on their investment, such as a private equity firm or search fund. Why it matters: Financial buyers study cash flow, growth, management depth, and exit potential because their goal is to earn a return on invested capital.

Reports that show how the business is doing financially, usually including the income statement, balance sheet, and cash flow statement. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An estimate of future financial results. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Cash left after the business pays normal operating costs and needed investments. Why it matters: Free cash flow helps buyers estimate how much cash remains for debt payments, owner distributions, reinvestment, or future acquisitions.

A document showing where money goes at closing. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

The detailed accounting record behind the financial statements. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Gross profit shown as a percentage of revenue. It shows how much money is left after direct costs. Why it matters: Buyers watch gross margin trends because falling margins can signal pricing pressure, rising costs, poor job costing, or weakening competitive position.

Revenue minus the direct cost of providing the product or service. Why it matters: Gross profit shows how much money is available to cover overhead after direct costs, making it an important clue about pricing power and operational efficiency.

Part of the purchase price that is held back for a period of time to protect the buyer. Why it matters: A holdback is similar to escrow but may be held by the buyer, so the seller should know when and why it can be kept.

Track ownership claim status and understand the review process.

See what happens after you submit an ownership claim and how review timing works.

Understand search filters, empty results, cash flow, and Bestimate.

Understand search results, filters, cash flow, and the Bestimate estimate.

Find the deal room and understand who can use the CIM generator.

Cancel billing, close your account, or request personal data deletion.

Separate subscription cancellation, account deletion, and privacy deletion requests.

Request a correction or removal when your company profile is inaccurate.

Learn how a business gets listed and how owners can manage the profile.

Update profile fields, email, billing details, and website information.

Short for indication of interest. Why it matters: An IOI is usually early and non-binding, so owners should treat it as a signal of interest rather than a final deal.

Short for intellectual property. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Intellectual Property before agreeing to anything.

A report showing revenue, expenses, and profit over a period of time. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A rule that one side must pay the other if certain losses happen after closing. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The maximum amount a seller may have to pay for certain claims. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A dealmaker who finds a business to buy and then raises investor money for that specific deal. Why it matters: Independent sponsors may move quickly after finding a deal, but sellers should understand how committed their capital is and who must approve the purchase.

A non-binding early offer that gives a rough price range and deal structure. Why it matters: An IOI helps separate serious buyers from casual ones before the seller shares deeper information or invests time in management meetings.

Combining the acquired business with the buyer’s systems, team, or operations. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

Creations the business owns, such as trademarks, software, designs, content, processes, or trade secrets. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The cost of borrowing money, shown as a percentage. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Products, materials, or parts the business owns and plans to sell or use. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Inventory that may be old, damaged, slow-moving, or no longer useful. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A high-end deal advisor who usually helps larger companies raise money or sell. Why it matters: Investment bankers are usually used for larger or more institutional deals where financing, buyer competition, and complex negotiations require a deeper transaction team.

The danger that the business depends too much on one person, often the owner or one top employee. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Teaching the buyer important information about customers, employees, systems, vendors, and operations. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

Short for letter of intent. Why it matters: Even if most LOI terms are non-binding, the LOI often shapes negotiating leverage for the rest of the process.

A possible customer. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A contract for renting property or equipment. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Lawsuits, threats, or claims that could cost money or distract the business. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

A bank or financing company that provides debt. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A written offer that outlines price, structure, timeline, exclusivity, and major terms before final contracts. Why it matters: The LOI sets the deal path before expensive legal work begins, so price, structure, exclusivity, financing, and key conditions should be reviewed carefully.

A legal claim against an asset, often because of debt. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Short for mergers and acquisitions. It means buying, selling, or combining businesses. Why it matters: Owners hear this term as shorthand for the entire deal world, including buyer outreach, valuation, diligence, negotiation, closing, and the post-sale handoff.

A deal professional who helps owners sell larger or more complex businesses. Why it matters: M&A advisors typically run a more structured sale process, prepare deeper buyer materials, and help compare offers beyond headline price.

Short for material adverse effect. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Material Adverse Effect before agreeing to anything.

The seller sells more than half of the business. Why it matters: A majority sale usually transfers control to the buyer while allowing the seller to take meaningful cash off the table.

A meeting or slide deck where the owner explains the business to buyers. Why it matters: Buyers use this meeting to judge the owner, leadership team, growth story, risks, and whether the business feels as strong as the materials suggest.

The leaders who run the business day to day. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A serious negative change in the business that could affect the deal. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An important contract that could affect business value or operations. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The date a loan must be fully repaid. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The purchase agreement used to buy LLC ownership interests. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A sale of ownership interests in an LLC. Why it matters: For LLCs, this structure transfers ownership interests and may affect taxes, consents, liabilities, and how the purchase agreement is drafted.

Books that are incomplete, inconsistent, or hard to verify. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

A riskier type of debt that sits between senior debt and equity. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The seller keeps a smaller ownership piece after the buyer takes control. Why it matters: With a minority rollover, the seller usually has less control, so governance rights, exit rights, and information rights matter.

The seller sells less than half of the business. Why it matters: A minority sale can bring in capital or a partner while the owner keeps control, but it requires clear governance and decision rights.

A promise that one customer gets pricing or terms at least as good as others. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A shortcut buyers use to value a business. For example, if a business has $1 million of EBITDA and sells for 5x EBITDA, the price is $5 million. Why it matters: Multiples make offers easy to compare, but the “right” multiple depends on what earnings metric is used and how risky or durable those earnings appear to buyers.

Non-disclosure agreement. A contract that says buyers must keep the seller’s information private. Why it matters: An NDA is one of the first protections a seller has before sharing sensitive financial, customer, employee, or operational information.

Short for net revenue retention. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Net Revenue Retention before agreeing to anything.

Profit after all expenses, interest, taxes, and accounting items. Why it matters: Net income matters for taxes and accounting, but buyers often adjust it to understand the recurring cash earnings of the business.

A measure of how existing customer revenue changes after upgrades, downgrades, and losses. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A deal-specific measure of working capital that often affects the final purchase price. Why it matters: Net working capital targets are often negotiated and can increase or decrease the final proceeds if actual working capital is above or below the agreed level.

A rule that prevents the seller from shopping the business to other buyers during exclusivity. Why it matters: A no-shop clause limits the seller’s ability to seek backup buyers, so the duration and exceptions should be negotiated carefully.

Not legally final. Many LOI terms are non-binding, meaning either side can still walk away. Why it matters: Non-binding language means the buyer can still change terms or walk away, especially if diligence, financing, or approvals do not go as expected.

A promise not to compete against the business after selling it. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An employee who usually must receive overtime pay when legally required. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A promise not to recruit employees or customers away from the business after closing. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Profit adjusted to show what the business should earn in a normal year. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

How much advance warning one side must give before taking an action, like ending a contract. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An unusual expense that is not expected to happen again. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Revenue from sales that may not repeat. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Software that can be used under public license rules, but those rules still matter. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A diagram showing employees, roles, and reporting lines. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

How much the business relies on the current owner to make sales, manage people, or keep operations running. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The company depends too heavily on the owner. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

Short for personally identifiable information. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Personally Identifiable Information before agreeing to anything.

Legal protection for certain inventions. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A letter from a lender showing how much debt must be paid off at closing. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

Possible unpaid payroll taxes, penalties, or interest. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A promise by an individual, often the owner, to personally pay if the business does not. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Information that can identify a person, such as name, email, phone number, address, or Social Security number. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Potential future sales the business is trying to win. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Important processes, passwords, contracts, or records are not organized. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

A price adjustment made after closing when final numbers are confirmed. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

A promise that continues after the sale closes. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

An investment company that buys businesses using investor money, often with debt, and tries to grow or improve them. Why it matters: Private equity buyers often use debt, expect reporting discipline, and may want the seller or management team to stay involved after closing.

Instructions sent to buyers explaining how to submit offers and what the seller expects. Why it matters: A process letter keeps buyers on the same schedule and helps the seller compare offers using consistent instructions.

Another name for an income statement, often called a P&L. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A forward-looking estimate, often used to show expected growth. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A deal where one buyer approaches the seller directly, usually without a broad auction. Why it matters: A proprietary buyer may offer speed and simplicity, but without competition the seller needs extra care to confirm price and terms are fair.

A lead that may be a good fit and is being pursued. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The main legal contract for buying the business. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The amount the buyer agrees to pay for the business. Why it matters: Purchase price only tells part of the story; timing of payment, seller notes, earnouts, rollover equity, escrows, and taxes can change the real value of the offer.

A change to the final price based on items like working capital, debt, or cash at closing. Why it matters: These adjustments can materially change proceeds after the headline price is agreed, especially around working capital, debt, cash, and transaction expenses.

A report from accountants that explains the quality of earnings and flags financial issues. Why it matters: The QoE report often becomes the financial roadmap for negotiations, lender discussions, working capital targets, and any price adjustments.

A financial review that checks whether reported earnings are real, repeatable, and fairly stated. Why it matters: A QoE review can confirm the seller’s numbers, uncover issues, or change the buyer’s view of valuation before closing.

A deal that changes the company’s ownership and financing structure, often letting the owner take some money off the table while keeping some ownership. Why it matters: A recap can let an owner diversify wealth while continuing with the business, but it changes control, debt, and future economics.

Revenue that repeats regularly, such as subscriptions, contracts, or ongoing service agreements. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Promises the seller makes about the business, such as financial accuracy, legal compliance, and ownership of assets. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Short for representations and warranties. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A limit on what someone can do after the deal, such as competing or soliciting customers. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Keeping employees after the sale. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The percentage of customers who keep buying over time. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The total money the business brings in before expenses. Why it matters: Buyers look at revenue trends, customer mix, and repeatability to understand whether the business is growing, shrinking, or dependent on a few sources.

When revenue depends too heavily on one customer, product, location, or channel. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The rules for when revenue should be counted. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

When the seller keeps part of their ownership in the business after the sale, hoping it grows and becomes worth more later. Why it matters: Rollover equity lets a seller participate in future upside, but it also means taking risk alongside the new owner.

A way to estimate yearly results using recent monthly performance. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A loan backed by the U.S. Small Business Administration, often used for small business acquisitions. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Seller’s Discretionary Earnings. This is often used for smaller businesses and estimates the cash flow available to one owner-operator. Why it matters: SDE helps owner-operators understand how much cash the business can support, but it may not be the metric institutional buyers use for larger companies.

Short for service level agreement. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Service Level Agreement before agreeing to anything.

Short for standard operating procedures. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Standard Operating Procedures before agreeing to anything.

Short for stock purchase agreement. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Stock Purchase Agreement before agreeing to anything.

The steps prospects move through before becoming customers. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Possible unpaid sales taxes, penalties, or interest. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An investor-backed buyer, often one entrepreneur, looking for one good business to buy and operate. Why it matters: Search fund buyers can be highly motivated and hands-on, but they often rely on investors and lenders, so financing certainty and operator fit matter.

A company document confirming approvals and authority to sign. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

Preparing the business, records, financials, team, and story before going to market. Why it matters: Readiness work can improve buyer confidence before launch by cleaning up financials, contracts, records, processes, and the owner’s growth story.

The current business owner who wants to sell the business. Why it matters: The seller is not just handing over ownership; they are also proving the business, answering diligence requests, negotiating risk allocation, and often helping with transition.

When the seller agrees to receive part of the purchase price over time instead of all in cash at closing. The seller essentially loans the buyer a portion of the price, often in the form of a seller note that the buyer pays back with interest. Why it matters: Seller financing can help close a deal when a buyer cannot or will not pay the full price upfront, and it is common in SBA-backed and main street deals. It also means the seller carries some repayment risk, so the rate, term, security, and any standby requirements from the senior lender all matter to the seller's real proceeds.

A loan from the seller to the buyer. The buyer pays part of the price over time. Why it matters: A seller note can help a buyer finance the deal, but it means the seller is taking repayment risk after closing.

Debt that gets paid first if things go wrong. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A promise about service quality, response times, uptime, or performance. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The business keeps less profit from each dollar of revenue. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

Permission to use software under specific rules. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Written instructions for how the business does important tasks. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A bonus paid to encourage an employee to stay through or after closing. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The purchase agreement used in a stock sale. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A deal where the buyer purchases the ownership interests of the company, including its assets and liabilities. Why it matters: Stock sales can be simpler for contracts and operations, but buyers may inherit more historical liabilities and will usually diligence those risks heavily.

A buyer already in your industry. They may buy your business to grow faster, add customers, enter a market, or remove a competitor. Why it matters: Strategic buyers may pay more if they see synergies, but they may also be competitors, so confidentiality and customer or employee information should be shared carefully.

Debt that gets paid after senior debt. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

How long certain promises and claims last after closing. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Short for trailing twelve months. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Trailing Twelve Months before agreeing to anything.

Taxes the business owes or may owe. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Official tax filings that buyers compare to financial statements. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A short, anonymous summary used to get buyer interest without revealing the company name. Why it matters: The teaser should create interest while protecting identity, sensitive customers, employees, and competitive information.

A short document listing the main terms of a financing or investment offer. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The section explaining how a contract can end. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Private business knowledge that gives the company an advantage, such as a formula, process, or customer method. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

A name, logo, or phrase that identifies the business or brand. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The most recent 12 months of financial results. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Time after closing when the seller teaches the buyer how to operate the business. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The time after closing when the seller helps the buyer learn the business. Why it matters: This affects what the seller, buyer, employees, and customers need to do after closing to keep the business stable.

Help the seller provides after closing so the buyer can smoothly take over. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

How often employees leave and need to be replaced. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

The business may not clearly own its brand, software, website, content, or designs. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

Expenses the seller adds back to profit without clear support. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

Taxes that may be owed but not paid. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

An estimate of what the business is worth. Why it matters: Valuation is a range, not a magic number, and it changes based on earnings quality, growth, risk, buyer type, deal structure, and market conditions.

The difference between actual results and the budget or forecast. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

An agreement with a supplier or service provider. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Important customer, vendor, or employee arrangements are not written clearly. Why it matters: Buyers may use this issue to ask for more diligence, reduce price, add protections, delay closing, or walk away.

Understand the difference between on-market and off-market businesses.

Understand the difference between active listings and off-market opportunities.

An electronic transfer of money, commonly used at closing. Why it matters: This term affects what must happen at closing, how money moves, and how final obligations are documented.

The short-term money needed to run the business, usually current assets minus current liabilities. Why it matters: Buyers expect enough working capital to be left in the business at closing so operations can continue normally without an immediate cash shortfall.

Short for year-to-date. Why it matters: This abbreviation appears often in deal conversations and documents, so owners should connect it back to Year-to-Date before agreeing to anything.

Results from the start of the current year through today. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.