When you put your house up for sale, you let as many people know about it as possible. You put up a “For Sale” sign in the front yard, you invite people to an open house, and you place ads in the newspaper and online. You want everyone to know that your house is for sale.
When a business is for sale, things are different. Advertising that your business is on the market creates uncertainty that can negatively impact profits and put the company at risk.
To sell your business for the best price, keep confidentiality during the sales process!
Why Do You Need A Sale Confidential?
What happens if someone finds out about the business for sale, as WebSite Closers say:
Employees Are Nervous
They worry that they will lose their jobs or not get along with the new owner. Some employees – perhaps the best of them – may even quit before you can reassure them. Losing key people is serious, especially during the sale process. Key employees provide the continuity and business knowledge that buyers need. Losing them means losing potential buyers.
Customers Start To Have Doubts
They may assume there are problems in your business that could threaten their supply chain. They may worry that they will not receive the same quality product or service from the new owner.
Competitors Will Spread The Word
Once competitors find out about it, they will tell your customers and use it as leverage to attract business to their company. This opens up the possibility for them to steal your business.
How To Maintain Confidentiality When Selling Your Business?
Here are 3 steps you can take to keep a sale confidential:
Prepare A Non-Disclosure Agreement
Before disclosing details of your business, prepare a non-disclosure agreement to be signed by qualified buyers. You can usually find sample agreements online (try this search) or work with your attorney to draft your own. Do not provide any details or specific information that could identify your company before the potential buyer signs this agreement. It is important to include a provision that ensures confidentiality from both parties as well as the duration of the agreement.
Do Not Mention The Company Name
Create an online company profile that contains enough information to generate interest without giving away company information. Buyers want to know the industry, description of the business, size, selling price, cash flow, general location, number of employees, and whether the sale includes real estate. When creating your listing, try to put yourself in the position of a potential buyer and ask yourself if certain details would reveal your company.
Work With A Business Advisor
As with other strategies for maintaining confidentiality when selling your business, working with a business advisor can not only help you maintain confidentiality but also help you position your business in the best possible light for the highest and best offer; business consultants typically act as a central hub for buyers, offering multiple listings that buyers can browse, ensuring that sellers gain access to qualified buyers while maintaining confidentiality. Business consultants also work with hundreds of buyers who may not regularly search listing sites so that they can get your business in front of the right ones.
How To Sell Business Confidential: Conclusion
Privacy is common sense. Think twice before sending an email, calling your broker, or meeting at their office. Next, make sure you choose a broker who knows how to sell your business quietly. And finally, prepare yourself for the fact that you will have to walk a tightrope of confidentiality in the next stages of the process.
Remember that a privacy breach is not a death sentence. With quick and thoughtful action, any privacy issues can be resolved before a serious problem arises.
And please don’t let fear of confidentiality deter you from contacting a broker before selling your business. The benefits of working with experienced and trusted advice far outweigh the risks of confidentiality.