If you’ve ever bought or sold a home, you know that the key to getting a property to the closing table is getting the word out that the property is for sale. As the seller of a home, you want people looking at your listing, perusing the pictures of the home inside and out, finding the home on a map and taking a drive by to check it out.
Isn’t the same true when you want to sell your business?
Business sales and real estate sales are two completely different animals. If you tell just a few people that your business is for sale the consequences can be devastating. People love a rumor and a bit of gossip, so if a few people know about your for-sale status it won’t take long for everyone to know your business is on the market.
Why is it a bad thing?
It will hurt your bottom line.
The time period from when you list your business to the day you reach the closing table should be a time period when you really push your numbers in a positive direction. Businesses with healthy numbers, with a good and stable list of clients and businesses with projected numbers on the rise are typically going to sell faster and for more money than those on a down-slide. It is imperative that you protect your business from anything that could cause problems with your bottom line – the major culprit in this sensitive time being a breach in confidentiality.
What could happen if confidentiality is breached?
Employees, nervous about the future under new ownership can leave and take their regular clientele with them. Vendors can decide to revoke perks you’ve had or cancel contracts. Customers may look elsewhere for their services because they worry about whether the quality they have come to expect from you will be the same under new management.
How can I keep my business sale under wraps?
Don’t tell anyone the business is for sale. Period. The only way that someone should be able to find out your business is on the market is if they get in touch with your business broker and sign the appropriate non-disclosure agreements. You shouldn’t talk about your business sale with your child’s elementary school teacher, the mailman or anyone else who is not your broker, transaction accountant, or transaction attorney.
Keep your business sale out of the rumor-mill by using the services of an experienced and qualified business broker – and don’t tell ANYONE.
Are you thinking about selling and are concerned about confidentiality? Do you have questions about how your business broker can both market your business to potential buyers and also maintain confidentiality? Ask us! Please leave us a comment or question here and we can address any concerns you might have.