When an earn out helps
When the business is growing faster than its history shows, and the buyer will not pay for growth it has not seen. You stay, you run it, and you are paid for what you deliver.
When it does not
When the buyer will merge your business into theirs, move your customers, or change how costs are allocated. You lose control of the number before the period ends.
What to agree in writing
The measure, the accounting rules behind it, who controls what, and what happens if the buyer sells or restructures the business during the period.
