Buying a Business: Transition Services

In a business purchase, the closing day is not the end of the deal – it’s a beginning of a new venture.

The transition is a period when the seller assists the buyer in the transition of the business – transferring customer relationships, explaining the market, sharing trade secrets, etc.

In the asset purchase agreement for my client, she wanted the seller to be available for sixty days on site for 4 hours per day to provide training, at no cost. But sometimes the seller is asked to provide more formal transitional services that may last from a few weeks to a few months or longer after closing, for additional fees.

Transition services should be negotiated as part of the purchase agreement – not after closing. Why risk starting a new relationship without an agreement on the basics?