Selling on Your Terms: How a Business Sale Can Actually Be Structured
A sale is rarely a single cliff-edge of cash. It's usually a mix of pieces you can shape, so you can step back on your terms and protect the people and name you built.
By Sandi Xian, Co-Founder
ex Canva, KPMG & Suncorp
When owners picture selling, they often imagine a cliff-edge: one day the business is yours, the next it's gone, a cheque clears, and you walk away. The reality is usually gentler, and far more flexible, than that. A sale is something you shape. And once you see the pieces, you realise you have more options than you thought.
Quick answer
Key facts
- 1.A sale is rarely a single lump of cash; it's a mix of pieces you can design with the buyer.
- 2.Common components: cash at completion, vendor finance, an earnout, and a paid handover period.
- 3.Earnouts for owner-run businesses are often 10 to 30% of the price, tied to performance holding up.
- 4.The headline price is usually enterprise value, not what lands in your pocket after debt, working capital and tax.
- 5.The non-money terms (your staff, your name, the handover) often matter as much as the number.
Selling isn't the cliff-edge you might picture
For most owners, the business isn't just an asset. It's years of your life, a team you care about, and a name you're proud of. So the idea of handing it over in a single moment can feel like too much. The good news is that it almost never works that way. A well-structured sale can let you step back gradually, stay involved for a while if you want to, and make sure the things you care about are looked after. The price matters, of course. But how the deal is built matters just as much.
What actually makes up "the deal"?
Behind the headline number, a sale is made of several moving parts. You won't use all of them, and the right mix depends entirely on you. Here are the ones that come up most often:
| Component | What it is | Why it might matter to you |
|---|---|---|
| Cash at completion | The part paid up front on settlement day | Certainty and a clean start |
| Vendor finance | Part of the price paid to you over time, with interest | Helps a good buyer proceed; shows your confidence |
| Earnout | An amount paid later if the business performs | Bridges a gap when the future is uncertain |
| Handover / consulting | A paid period where you stay on to transition | A gentler exit; your team and customers are looked after |
| Working capital | An agreed level of cash, stock and debtors left in | Keeps the business running smoothly day one |
| Restraint of trade | An agreement not to compete for a period | Standard; usually a few years and a set area |
Why structure can bridge a gap on price
Sometimes a buyer and seller simply see the future a little differently. You know the business is strong. The buyer wants to be sure it holds up after you leave. Instead of arguing over a single number, structure can meet in the middle. A small earnout, or a portion of vendor finance, lets the buyer share the risk and rewards you fairly if things go as you expect. When Marcus and I look at a business, honestly, we'd rather shape a deal that works for the seller than try to win on price alone. A deal both sides can feel good about is the one that actually completes, and lasts.
The parts that aren't about money
Some of the most important terms in a sale aren't financial at all. In my experience, owners of long-held businesses care deeply about three things:
- Their people. That long-serving staff are kept on and looked after.
- Their name. That the business they built carries on, rather than being absorbed and forgotten.
- A respectful handover. Time to introduce customers properly and hand over what's in your head.
A buyer who genuinely cares will build these into the deal, not treat them as afterthoughts. If they matter to you, say so early. The right buyer will want to hear it.
A gentle truth: the headline price isn't what you take home
I want to be honest with you about this one, because it catches people off guard. The figure everyone talks about is usually enterprise value, the value of the business itself. What lands in your pocket is different. From that number, any business debt is subtracted, a working capital adjustment is made, and then tax applies on what's left. The gap between "the price" and "the proceeds" can be meaningful. None of this is a reason to worry. It's a reason to sit down with your accountant early, so you go in with clear eyes and no surprises.
Who should you talk to?
This is where I'll gently hand you to the experts. Lumina Ventures isn't a financial adviser, and the right structure for you depends on your circumstances, your tax position and your goals. Please bring in:
- A commercial accountant, for the tax treatment and what you'll actually take home.
- A commercial lawyer, for the contract, the warranties and the restraint.
- Where helpful, a finance broker who knows business sales.
We're always happy to point you to good people in our network if that would help.
A final thought
If selling has felt like an all-or-nothing decision you're not ready for, I hope this softens it a little. You have more ways to shape a sale than you might think, and the best ones are designed around the seller, not just the spreadsheet. Two simple next steps when you're ready:
- See where you stand with our free business appraisal tool (an indicative range and exit-readiness score).
- Or just have a quiet, no-pressure conversation with us about what a sale could look like for you. You can reach us here.
This guide is general information to help you understand your options, not financial, legal or tax advice. Lumina Ventures is not licensed to provide financial advice. Please speak with your own accountant, solicitor and financial adviser before making any decisions.
Frequently asked questions
Do I have to sell my business for all cash up front?
Usually not. Most owner-run business sales are a mix: cash at completion, sometimes some vendor finance, sometimes an earnout, and often a paid handover period. The structure is something you shape with the buyer and your advisers, so it can be designed around what matters most to you, whether that's certainty, a clean exit, or looking after your team.
What is vendor finance, and is it common?
Vendor finance is where you, the seller, let part of the price be paid over time instead of all at completion, a bit like lending it to the buyer. It's common in smaller business sales (often under $2M) and is usually a modest slice with interest. It can help a good buyer get a deal done, and it signals your confidence in the business. Whether it's right for you is a conversation for your accountant and lawyer.
What is an earnout?
An earnout is part of the price that's paid later, if the business performs as expected after the sale. For owner-run businesses it's often around 10 to 30% of the total, tied to something like revenue or customer retention holding up. It can bridge a gap when buyer and seller see the future a little differently, but the terms matter, so have them reviewed carefully.
Is the sale price what I actually walk away with?
Not quite, and this is important. The headline figure is usually enterprise value. From there, any business debt comes off, a working capital adjustment is made, and tax applies, before you get to what actually lands in your pocket. Always work through this with your accountant early so there are no surprises.
Sandi Xian
Co-Founder, Lumina Ventures · ex Canva, KPMG & Suncorp
Sandi and Marcus are a Brisbane couple acquiring one essential services business in South East Queensland to own and run themselves. They also run hands-on Business Audits that help owners grow EBITDA and prepare for a sale.
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