When it comes to selling a business, some owners are afraid to let anyone know about the sale. Others want to advertise to everyone they possibly can in an effort to market the company and get exposure. Every business sale is different, but confidentiality plays an important role in all of them. The sellers who are afraid to advertise are usually just worried about the competition, because they can use the sale of the business to their advantage, but knowledge of the sale can affect your relationship with vendors, customers, employees and lenders as well. Here is a simple guide to who you should tell about your business sale, and when.


Your advisors should be the first to know about your pending business sale. An advisor would be anyone who provides critical consultation services for your business. This includes investment bankers, your CPA, attorneys or financial planners, to name a few. To have a successful transaction, your advisors should have experience with completing business sales.

The advisor who can best guide you through all aspects of the business sale process, including informing you on when to divulge private information about your business, or to whom, is a business broker. This is not to say the others aren’t necessary. You will want an attorney involved when putting together a formal purchase agreement. A CPA can advise you on tax implications of the sale and a financial planner can help you with post-sale investment options. However, a business broker can act as a buffer between you and the buyer. They will prequalify buyers and screen them, and only divulge information to the serious ones. Brokers also have experience in confidential marketing, so they know how to attract buyers to your business without revealing its identity.


You should avoid knowledge about the sale of your business getting out to the competition. They may try to purge your customers by giving them doubt about the future of your business. They can also sabotage your relationship with your suppliers or vendors, if they share any with you. At the same time, there are situations where competing companies may be able to pay the most for your business. If you are interested in selling to a competitor, make your business broker aware. In some cases, they may already have someone in mind. Either way, they will have the competing company sign a Non-Disclosure Agreement (NDA) and make sure the buyer is not just kicking the tires or fishing for private information about the business before divulging more details to them.


Most of your employees should be shielded from knowledge about the sale of the business for as long as possible, even up until the day before the transaction. Because employees are the most impacted by a change of ownership, they are also the most suspicious about pending changes. Knowledge of the sale could cause some to come to their own assumptions about the sale, such as predictiing layoffs or other negative impacts. This could lead to staff members pursuing other employment during the sale process, which could disrupt business. This is not to say all employees should be left in the dark. Some key staff members might need to be brought into the process, to help make the business look good and show the new owner a path to ownership by reassuring them that there is a capable staff. In some cases, an employee may even be interested in buying the business, or you may have one in mind to be your successor.


You typically never want to let customers know if the company is for sale. Ideally, you want to continue to serve them and resume business as usual. Just like your employees, customers may worry how changes in ownership will affect them. They could get concerned about pricing or the level of service changing and preemptively start looking for a new place to do business. If your company is listed for sale publically, you cannot control whether customers find out or not, and your competitors can be opportunistic about stealing them away.


Give your vendors the impression of stability by not disclosing that your company is for sale. If they discover that it is, they might get concerned about you continuing to honor their agreements or payment terms. If they find out, they will probably be reluctant to enter into any long term agreements with your company. In addition, they could change their terms to adjust for volatility or a change in ownership. For these reasons, it is important not to let vendors know until the sale is final.


You cannot sell your business without having a buyer, but not all buyers are created equal. Many potential buyers are just curious about the sale details. They might be fishing for information, or they may just like the idea of purchasing a business, but are not serious about it. This is why you should not make your sale public. Imagine trying to run your business, but several times per day you are interrupted by someone who walks in, who wants to know more about the company, because they found out it was for sale. Listing confidentiality avoids that, and helps you focus only on the buyers who really want to buy, and who have the financial ability to do so. This is another benefit of using a business broker, because a broker can entertain buyers while you focus on running your company. They also have a constant influx of buyer leads, so they could have a potential match for your business as soon as you list it.

Besides the aforementioned groups, you should shield knowledge of the sale from anyone who may potentially leak information about the sale. Creditors, or anyone else the business may have contractual obligations to, should not be informed until the sale closes. Remember that anyone who knows about the sale can tell others, so it is critical to keep all parties on a need-to-know basis. Working with a business broker is an integral part of keeping information leaks from happening. Besides listing the company confidentially, they will make sure to use an NDA to legally protect you. If the wrong person finds out that you are selling, it could compromise the sale and cost you a lot of money.

Selling your business confidentially is an integral part of a successful sale and maximizing your profit. However, keeping the sale a secret is near impossible if you are trying to sell on your own. If you own a business in Southwest Florida, near Fort Myers, Sarasota or Naples, and are considering selling, contact Corporate Investment Business Brokers (CIBB). We have over 30 years of experience in confidential business sales, and a long list of buyers ready to purchase successful, proven businesses.

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