Earnouts Explained: How Deferred Payouts Work in a Sale
Key takeaways An earnout is a portion of a business’s sale price the seller collects after closing, and only if the business hits agreed
Plain-English breakdowns of margin, cash flow, inventory, and Amazon economics, written for the operators running the business.
Contribution margin, COGS, pricing, promos
13-week forecasting, CCC, burn & runway
Reorder points, forecasting, landed cost
Budget vs actual, models, scenarios
Margin, CAC, retention & ops benchmarks
Ratios, KPI packs, public-company teardowns
FBA fees, ACoS/TACoS, reconciliation
Ecom accounting, COGS, cash vs accrual
Starting, funding, valuation, finance terms
Key takeaways An earnout is a portion of a business’s sale price the seller collects after closing, and only if the business hits agreed
Key takeaways A cap table (capitalization table) is a record of who owns your company, listing every shareholder and their shares, options, and convertible
Key takeaways Ecommerce funding falls into three families: debt (you borrow and repay with interest), equity (you sell ownership for capital you don’t repay),
Key takeaways Pricing a business for sale starts from its valuation, an earnings figure times a multiple plus inventory at cost, then turns that
Key takeaways It’s the right time to sell when the business is in sellable health, clears the buyer’s minimum bar, and nets you a
Key takeaways In a downturn, liquidity matters more than profit on paper, so the number to protect is runway: how many months your cash
Key takeaways Sales tax nexus is the connection between your business and a state that obligates you to collect and remit that state’s sales
Key takeaways A SKU (stock keeping unit) is the internal code you assign to each sellable product and variant to track it, and you
Key takeaways QuickBooks Online and Xero are both strong ecommerce ledgers; for most sellers, the choice comes down to three things: where you sell,
Key takeaways An accrued liability is a cost you’ve already incurred but haven’t been billed or paid for yet, and it sits in current
Key takeaways Cash accounting records revenue and expenses when money moves; accrual records revenue when you earn it and costs when you incur them.
Key takeaways An inventory costing method is the rule that assigns cost to the units you sold (COGS) versus the units still on hand
