Maintaining Confidentiality When Selling a Business
When the time comes to sell a business, selecting a business broker who understands the importance of confidentiality is a must. Selling a business is a process that depends upon professionalism and confidentiality. Failure to keep quiet about an impending business sale can lead to negative reactions from numerous parties, such as suppliers, vendors, creditors, customers and employees. An experienced, licensed brokerage firm like Corporate Investment Business Brokers can help navigate the complicated selling process confidentially, giving the business seller peace of mind.
Failure to maintain confidentiality
Failure to maintain confidentiality could harm your business. Vendors could change their terms and in turn, negatively impact the business’ cash flow. It also can spark aggressive reactions from competitors that could weaken momentum and decrease the business’ value, as well as prompt competitors to attempt to steal the business’ customers. A breach of confidentiality could cause employees to begin to worry about and the change in management and the security of their jobs, potentially prompting them to leave the business. As a result, a potential buyer may walk away, due to the loss of key personnel. Additionally, customers may forego a deal simply to avoid headaches associated with a breach of confidentiality.
Protecting a business sale
There are a number of steps a business owner can take to ensure that confidentiality is maintained throughout the sales process. The most important is to hire a qualified business broker. A business broker is an expert in inciting a business without notifying the competition, employees, vendors or anyone else. Business brokers can field inquiries from potential buyers and reach out to prospects without naming the business. They are also skilled at revealing just enough information to pique interest, while keeping the business’ identity confidential.
When a business owner attempts to sell a business on his or her own, there are many pitfalls he or she may encounter. Sellers are more likely to reveal who they are, as a seller has to provide phone numbers, addresses, email addresses and other identifying information. A simple phone number can be traced back to a business owner’s identity, as well as to the business. An experienced business broker can help bypass these potentially damaging issues and help protect the business.
The importance of confidentiality agreements
A great business broker will not only help protect your business’ identity, but also ensure that all interested buyers are prequalified and that they sign confidentiality agreements. These agreements help ensure that potential buyers keep information they receive about the company and its sale confidential, as well as reduce the chances of rumors spreading about the sale. In this way, a business owner can preserve the ongoing value of the business. This is paramount to a buyer, as they will want to ensure continued success of the business.
Balancing buyers’ questions and retaining confidentiality can be tough. Utilizing a business broker can help aid in the process and ensure that the sale of the business goes smoothly.
Corporate Investment Business Brokers has the experience and expertise to help you. Please contact us for a free consultation. Call (239) 936-1718.