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... tense. This often is because assumptions were not communicated well at the beginning. As the process unfolds, both sellers and buyers will become more educated on matters such as the tax consequences of different deal structures that can change the outlook for both parties. Buyers might expect a "free ride," rather than taking to heart the term "sweat equity." In most buyouts, the first few years are supposed to be tough. You own the business as much as you own a house after a modest down payment and earn equity as you make the mortgage payments. If you don't deliver on your business plan, then the seller or bank can step in. CONCLUSION Buyers, keep in mind that if a seller wants to, they can call a few large buyers, hold an auction, and get top dollar. Sellers, keep your goals in mind as well as buyer's expectations. In private transactions, the deal needs to be fair to everyone — or there's no deal. As the transaction date approaches, interactions should feel more like discussions and brainstorming sessions than negotiations. There's no panacea for perpetuation. Plan 10 years ahead. Get help, and bring in the right resources. Most of all, hold open and frank discussions between the sellers and buyers to be certain that all parties understand the process every step of the way. Internal deals can deliver the best of all worlds if they're done right. Alfonso Ventoso is a vice president with Business Management Group (BMG), a management consulting firm that specializes in the insurance industry. To learn how BMG can ...