Should You Take the Cash or Bet on the Future?

You're selling your business, you really have two main options. You can take the cash upfront or you can accept an earn out. But which one is better? So let's break that down. But first, what's the difference? So cash up front. That means full payout at closing, less risk to you. Lower total sale price. Usually an earn out, which is also known as a performance based payment, is potentially at a higher total sale price. It shows that you have some confidence in the future growth of the business. But it's also risky. It depends on business performance after you sell. Now. Fun fact, Most businesses sell for a mix. You're going to see typically 70% cash with 30% of an earn out. To align incentives.