When your business is on the market one of the most important things is maintaining confidentiality. This is imperative to protect your business from the consequences of the wrong people finding out that the business is for sale.

Who are the wrong people?

Your employees, your competition, and your vendors to name the most important few. If this group finds out you are for sale before you are able to get a buyer and get to the closing table, the results could be disastrous. A mass-exit of staff, issues with vendor contracts, and your competition using your for-sale status against you are all things that are going to hurt your bottom line. This is especially bad at a time when your bottom line might mean the difference of being able to sell and not being able to sell.

How do you prevent a breach in confidentiality?

First, hire a good business broker. A good broker knows how to successfully market your business without disclosing the status to the wrong people. A broker will only disclose the name and location of a business to someone who has signed the appropriate non-disclosure agreements, meaning there will be legal ramifications if they disclose your business to anyone else.

Second, suppress the urge to tell anyone that your business is for sale. It can be hard to stay quiet when such a monumental change is about to happen in your life, but even the smallest disclosure can have big consequences. The only people who should know the business is for sale is you, any other owners, your broker, and the CPA’s and attorneys who are helping you with your transaction. Don’t tell your brother-in-law, your neighbors, or the parents at your child’s soccer game. People love a juicy rumor, and before you know it literally everyone will know you are for sale. Mum’s the word.

Third, give your broker a list of people they should not disclose to – even if those people sign non-disclosure forms. Your broker doesn’t know everyone in your world, so you will need to give them the names of employees, your competition, and your vendors. This will keep your business sale out of the hands of people who are looking for information instead of those who are actually looking to buy.

Last, be cautious with the amount of information that goes into your marketing package. Competitors might watch the business listing sites, and they might be able to figure out it’s your business that is listed if there is any information in your listing specific and unique to what you do. A good broker will be able to help you with this part of the process, letting you know what should go in the initial listing versus what will go into the marketing package someone receives after they have signed the non-disclosure documents.

In order for your business sale to be successful confidentiality must remain in place. Use the services of a business broker and stay quiet.

Are you a business owner who is thinking about selling but you are concerned about keeping confidentiality in place? Please feel free to leave us a comment or question here, and we will be happy to address any concerns you may have.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com