Dr Allen Nazeri DDS MBAHealthcare M&A Expert

Why Buyers Care About Your Contracts: Vendor, Customer & Employee Agreements Explained| PRIME exits™

16 Apr 2025 · 1 min

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1:12

Dr. Allen Nazeri (DDS, MBA) explains why prospective buyers closely examine vendor, customer, and employee contracts when valuing a business and gives concrete steps sellers can take to reduce risk and improve valuation prior to a sale. Buyers look for clear, enforceable agreements that secure competitive vendor pricing, multi-year or long-term customer commitments, and effective employee protections (e.g., non-compete clauses). Ambiguities, unfavorable terms, or short/expiring agreements can lower valuation; Nazeri advises reviewing expiration/renewal clauses, identifying liabilities, and renegotiating terms (for example, securing multi-year customer agreements or better vendor pricing). The video ends with a CTA offering a free market valuation and advisor connection (contact shown).

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Buyers scrutinize vendor, customer and employee contracts to assess risks and ensure operational stability post sale. They want to see clear, enforceable agreements with favorable terms such as competitive pricing from vendors, long term commitments from key customers, and non compete clauses with employees. Ambiguities or unfavorable terms can raise red flags and reduce your business's valuation. Before selling, review all contracts for expiration dates, renewal terms, and potential liabilities. Renegotiate where necessary to strengthen your position. For example, securing multi year agreements with top customers or revising vendor terms to lock in better pricing can make your business more appealing. Please feel free to connect with me by emailing me alaniaguizz.com and I will be happy to provide you a free market valuation of your company and connect you with one of our lead advisors specific to your needs.