Business Brokering Buy Sell Business – Worldwide Business Brokers

Selling a Business Part 6: The Closing

Selling a Business Part 6: The Closing

19 June 2023: Selling a Business Part 6: The Closing

As I’ve mentioned consistently over the years, selling a business takes time and as a rule we advise our clients to budget six to 12 months for a business that is properly priced to sell. But even after going through the process  – all the time and steps to get to the point of seeing the closing table in sight – our work is not over. And plenty can still go wrong.

This is the sixth and final installment in our 6-part series on selling a business and this one is about not only the closing – what leads up to it and how to prepare – but also the post-closing period when certain responsibilities on the part of the seller must be fulfilled and certain goodwill acts on the part of the broker would be wisely performed.

Albeit a momentous event for both parties, the closing itself is a relatively pedestrian affair from the standpoint of its mechanics. Post-closing, however, can, depending on the terms of the agreement and the how well the seller has prepared themself, involve some disappointment.


We offer a comprehensive coaching program  – both group coaching in our Brokers’ Roundtable℠ community as well as one-on-one coaching – tailored to Realtors, business owners, buyers and anyone interested in valuing, buying or selling a business.

If you’d like to learn more, email me at jo*@Wo*******************.com



The closing requires documents; lots of them. Some of these documents  – such as financing statements and notes, non-compete agreements, settlement or closing statement, etc. – are specific to the mechanics of the closing. Theses are essentially “signing documents”.

Others are referred to as “deliverables”; the assignment of existing contracts, customer/client lists, titles to certain assets and the like.

A transaction/closing attorney will oversee the production of the former. A professional business broker will help the seller collect and prepare the delivery of the latter. However, from the broker’s standpoint, an often overlooked but very important document is a commission statement.

A commission statement, as we teach in our Course, takes two forms. One, is an acknowledgement by the seller that a commission is due the broker either at the closing or on a schedule previously agreed to, usually in a listing agreement, by the seller and broker. We advise brokers to get this document signed either concurrent with or very shortly after the acquisition agreement being fully executed.

It’s important that this be done no later than the immediate aftermath of the parties signing the final agreement when the seller is usually in high spirits. Though we’ve found it to be rare, as I’ve written previously – here and here – brokers sometimes run into a seller who is somewhat “ethically challenged”.


Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses, teaches you how to accurately value and successfully sell businesses.

The other form a commission statement should take is one that is delivered by the broker, on letterhead, to the closing attorney stating the commission due at closing. Ideally, this document would be delivered with the commission statement mentioned above – the one signed by the seller – attached.

Here’s why we consider such commission statements important.

The closing attorney will distribute a draft of the settlement statement to the parties. Unfortunately, upon seeing in writing, the actual amount of the commission to be paid to the brokerage, it is not unheard of that a seller might balk. These two documents will go a long way toward eliminating eleventh-hour disputes.

Post Closing

Even in smaller business, there is a transition period post-closing during which the buyer transitions into the responsibility for the business’ day-to-day operations which is now under their control. This transition period includes such tasks as updating who is authorized to sign on bank accounts, building trust with employees, providing any post-closing notices to third parties such as vendors and customers, counter parties to contracts and any number of government bureaucracies.

But in many cases, especially those in which the buyer is a private equity firm, the deal may require the seller to stay on and run the business.

(The Brokers Roundtable℠, an online community created and hosted by Worldwide Business Brokers, has scheduled a live interview with Greg Brinson, of CapLink, a provider of virtual data rooms, for Thursday, 15 June to discuss the need for confidentiality and strict control of access to financial and other confidential data when selling a business. At the conclusion of that discussion there will be a Q&A during which attendees can get their questions answered by a pro. But you’ve got to be a member to attend. You can sign up for The Brokers Roundtable℠ here.)

In such an instance, the deal may have been structured as an earn-out, whereby the parties have agreed that the final value of the business will be determined by its performance over a certain period of time following the closing.

A potential problem in such a situation is that under the terms of the acquisition and earn-out agreements the seller, still responsible for the business’ operations and results, does not have enough autonomy and decision-making power to do what he or she feels is best to reach the preset goals necessary to realize the anticipated economic benefits of the earn-out.

When this happens, disillusionment can set in souring the relationship between the now-previous owners and the new ones benefiting no one.

The Bottom Line

Whether you’re a business owner selling or a business broker brokering the deal, it doesn’t matter how well-prepared you think you are for this final phase of what is often an epic undertaking; plenty can still go wrong.

When an impediment arises and friction erupts, two results are possible; 1) the parties can work things out – meaning someone, possibly including the broker, has to give up something thus souring the experience for pretty much everyone and; 2) the deal collapses entirely.

Both these unpleasant outcomes can largely be avoided if everyone involved is paying attention to the details as the closing date approaches.

I’d like to hear from you. What topics would you like me to cover? How can we tailor these posts to be more useful to you and your business. Let me know in the comments box, below, or email me at jo*@Wo*******************.com.

If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.

I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.


Searching For…

A U.S.-based private equity fund is looking for opportunities to acquire “small-cap” business anywhere in the U.S.; those with revenue between $5M and $50m and minimum EBITDA of $1M. They are open to opportunities in nearly all industries except restaurants and C-stores.

If any of you know of something that might fit, please let me know.


#business #businessacquisition #sellabusiness #becomeabusinessbroker #businessbrokering #businessvaluation #MergersandAcquisitions #buyabusiness #sellabusiness #realtor #realestateagents


The author is the founder, in 2001, of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 600 in the world. He can be reached at jo*@Wo*******************.com

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