There are numerous reasons why keeping your business information private is critical during the sale process. The most apparent reasons to maintain confidentiality would be to prevent competitors or customers from finding out, but it could also be for the sake of protecting sensitive data and information about the business. Business Brokers have extensive experience in how to market your business without exposing sensitive information, while still pursuing potential buyers. They have procedures in place for how and when they disclose information about your company in the process of a sale and finding buyers.
Creating a Barrier
If you were to decide to sell your business on your own, you would discover very quickly how difficult it is to maintain confidentiality without outside help. A business broker provides a central point of contact, so that the key identifiers of your business, such as the phone number, location, email address, etc., are not exposed. They act as a barrier between a business for sale and a prospective buyer, using a blind profile to provide basic information about the business as first. Only after gauging interest and pre-qualifying buyers do they start to release more information.
In the process of finding a buyer, business brokers screen prospects by pre-qualifying them before sharing sensitive information. Many people who inquire about the sale of a business are not financially qualified to make the purchase. They may also be competitors searching for information, trying to figure out the identity of the business for sale. During the vetting process, a broker will ask interested parties for their related business experience, their timeline for purchasing, information about their assets and whether or not they have been approved by a lender as well as where they work or if they already own a business. They will be required to sign a Confidentiality and Nondisclosure Agreement, which will expect them to keep any information they receive private, and specify penalties if they do not. As prospects progress through this process of qualifying, more information about selling the business is released to them.
These strategies help limit the number of people who are just fishing for information and help save time by filtering out financially unqualified buyers. By narrowing the field down to a few, quality leads, the likelihood that information gets out to the general public is greatly reduced. If the sale of your business is kept private, it will prevent customers and employees from becoming skittish due to uncertainty about the future of the company, and prevent competitors from trying to poach your business.
Protecting Your Data and Preventing Fraud
Small businesses are increasingly become the targets of identity fraud. If a scammer gets enough sensitive information from inquiring about the sale of your business, they can use it to submit loan applications in your name or open a credit card, among other things. This is an important consideration to take when marketing the sale of a company towards buyers. Some business owners turn to commercial real estate agents to help sell their business, but real estate firms generally do not consider data protection when presenting a business to prospective buyers. This is why it is so important to hire a specialist, such as a business broker, who handles these scenarios on a daily basis.
Selling on Your Own Isn’t Worth the Trouble
While business owners may be sensitive to keeping their data and business identity private while looking for a buyer, they generally lack the experience and tools to do it successfully. As professionals who are experienced in selling large and small businesses confidentially, Business Brokers have a specific process they use every time they list a company for sell or handle a buyer inquiry. Allowing knowledge of the sale of a business to become public, or accidentally leaking sensitive information can cause you to lose customers or employees, thereby reducing its value. The damage it could do to a business is not worth the risk.
An experienced business broker can not only help you sell your company confidentially, but also get the most value for your business. They can help you find a buyer while providing peace of mind and allowing you to run the business, without disturbing day-to-day operations. If you’d like to discover selling your business discreetly, contact CIBB today and start with a free business valuation.