You are very excited about your decision to buy your own business, but a few days into your search, you discover that you are having trouble getting cooperation from anyone in the industry.

Why is this happening? The business marketplace is complicated, and there are fundamental differences about this market that a buyer will need to understand in order to navigate it successfully.

First of all, buying a business is almost nothing like buying a house, something most new buyers are surprised to hear. The major difference is the concept of confidentiality.

In business transactions confidentiality (the concept that the only people who know the business is for sale are the sellers and the people who are going to buy it) is paramount for a number of reasons.

When the news that a business is for sale lands in the hands of the wrong people, like the staff or vendors, it can cause major issues for the business (like an entire staff quitting or the loss of vendor contracts).

As such, business buyers must follow a few guidelines in order to protect the businesses they are considering buying. You will need to sign something called a non-disclosure agreement. This agreement means that there will be legal consequences if you disclose the knowledge you have about a business that is for sale to an inappropriate party. This agreement protects the seller from such disclosures.

Confidentiality also means that you can’t drive around and pop into businesses that you know are for sale whenever you please. Meetings and visits must be scheduled in advanced with the seller to ensure that employees will not be present. It can be catastrophic for a business if a buyer walks in during business hours and starts asking questions.

How does a new buyer navigate the business marketplace successfully? Get your own business broker. They know the “rules or the road”, are able to get cooperation from sellers and other brokers, and can help you get the appropriate non-disclosure agreements from the businesses you are interested in.

Are you looking for businesses to buy, but haven’t had much luck getting anyone to help you? Do you have questions about what a non-disclosure agreement means for you as a buyer? Please feel free to leave us a comment or question here, and we will be happy to answer any business buying question you may have.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com