In a business acquisition, whether inventory comes with the business largely depends on the structure of the deal. If the acquisition is structured as a stock purchase, the buyer generally acquires all the assets of the company—including the inventory. However, in an asset purchase, only the assets specifically listed in the purchase agreement are included, so any inventory must be explicitly identified and agreed upon by both parties.

For many small retail businesses, it is common practice for the inventory not to be included in the base sale price. Instead, buyers typically perform a physical inventory count before closing and adjust the purchase price accordingly to account for any discrepancies. This approach ensures that both parties are fairly compensated for the actual stock on hand at the time of the transaction.

Additionally, inventory valuation plays a crucial role in these transactions. Methods such as cost basis, market value, or net realizable value are often used to determine the fair value of the inventory. Buyers and sellers also finalize details like whether the valuation uses FIFO or LIFO in the purchase agreement, which helps avoid any misunderstandings regarding adjustments or pricing differences later on (Morgan and Westfield).

At Iconic, we recognize the complexities involved in acquisitions. Our comprehensive 5-step selling process (The Iconic Way) is designed to guide you through every detail—including how inventory is managed in your deal—to ensure transparency and control. Whether you're buying or selling, our dedicated expert team is here to help you structure a transaction that truly reflects your objectives, making the process as straightforward and efficient as possible.

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• In transactions where seller financing is involved, adjustments to the principal amount on promissory notes may be made based on the final inventory count—ensuring any discrepancies are fairly reflected in the deal’s structure (CertifiedBB).

• Many purchase agreements specify exactly who is responsible for conducting the inventory count—whether it's the buyer, seller, or a third party—to minimize potential disputes at closing (Morgan and Westfield).

• Professional business brokers often list a "normal" level of inventory in the asking price, meaning that any deviation from this standard is typically negotiated through price adjustments at closing (BizBuySell).