What Is an Earnout and Should You Accept One | Books & Backbone

An earnout lets a buyer pay part of the purchase price after closing — based on whether the business continues to perform. Most sellers encounter them at the negotiating table without fully understanding what they're agreeing to.In this solo episode of Books & Backbone, Donna Harris explains what earnouts actually are, when they protect the buyer at the seller's expense, when they can genuinely work in a seller's favor, and what to watch for before you sign. She also shares exactly how she structures earnouts in her own acquisitions — because sellers deserve to know what an honest buyer looks like.The earnout isn't inherently good or bad. It depends on how it's structured, what the metrics are, and what kind of buyer you're dealing with. This episode helps you tell the difference.Donna Harris, MBA, MAccCEO, Bookkeeping Made Simple LLCmysimplebookkeeping.com | 801-692-0032