When it comes to negotiating a business sale, the price tag might not be as crucial as you think. Sometimes, the terms of the deal can carry more weight than the actual dollar amount—for both the buyer and the seller. https://youtu.be/iqo5EngtGa8
A Lesson in Smart Deal-Making
Recently, I worked with a consulting client who gave me one of the best testimonials I’ve ever received. After a short phone conversation, I helped him restructure the terms of a deal he was already negotiating—and the result? An extra $250,000 in his pocket.
This isn’t a one-off story. I’ve previously discussed similar situations, like the time a business owner sold for more than expected by simply offering better vendor financing terms to the buyer. The buyer couldn’t find comparable terms elsewhere, which made the higher price acceptable.
Canadian Share Sale and Tax-Free Gains
The client I helped recently was selling shares of his Canadian business, a type of sale that qualifies for tax-free capital gains under certain conditions. He had smartly prepared with his accountant over the years, combining his tax-free allowance with his spouse’s.
The Catch: Interest Income
However, when sellers finance a portion of the sale and collect interest, that interest income is taxable. We discussed structuring the deal to offer low-interest vendor financing in exchange for a higher overall sale price. This made the offer more attractive to the buyer and more profitable (and tax-efficient) for the seller.
Outcome
The seller met with the buyer, proposed the new terms, and the buyer accepted. The deal closed with an additional quarter-million dollars in the seller’s hands, purely from creative thinking and flexible negotiation.
How You Can Do the Same
If you’re thinking of selling your business, it's crucial to:
Prepare Properly – This seller had been working with a tax advisor for years.
Get the Right Help – Strategic advice can uncover value you didn’t know was possible.
Visit www.howtosellmyownbusiness.com to learn about the five-step process I use with clients:
Education
Evaluation
Preparation
Advertising
Coaching
Final Thoughts
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