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The Business Sale With an Earnout

Structure drives the valuation.

The negative impact of the COVID-19 pandemic has exacerbated the risk of using only a fixed price for the sale of a business. Many businesses have experienced a significant reduction in revenue that reduced their current values. Therefore, in the COVID-19 era, the gap between a seller’s asking price and the price a buyer is willing to pay is likely to be more pronounced than ever before. The seller typically feels that the business will return to its pre-COVID value in the short run, while


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