Seller Beware! Don’t Let The Rumor Mill Get You.
How To Protect Your Confidentiality While Selling Your Business
Unlike the sale of any other asset there is a unique facet that makes the sale of a business much more difficult than other sales processes. If you are selling a home you put a sign in the front yard to let the neighborhood know the home is for sale. Auto dealerships strive to be as obnoxious as possible in commercials just to get the word out. But, because business owners still need to conduct business during the selling process, in most cases screaming from the mountaintops to gain awareness of the sale is not at all possible. If employees, vendors, customers, or competitors knew of an impending sale the business could be badly damaged.
BEWARE: A Breach of Confidentiality Could Devastate Your Business
- Nervous employees could leave and take customers with them
- Customers might push for more discounts or try competitors as a backup
- Vendors/Suppliers may fear trouble and tighten payment terms
- Competitors could use it to their advantage by “bad-talking”
So, how do you publicize the sale without breaching confidentiality?
6 Ways of Protecting Your Confidentiality
- Remain Anonymous & Silent About Your Interest In Selling
Sadly, most breaches in confidentiality in a business sale are actually caused by the owners themselves. Be careful of disclosing the sale of your business to “trusted employees” or even friends. If ever asked if you are selling your business deny, deny, deny! Disclosure to anyone should be on a “need-to-know” basis. You should only disclose to those who need to know in order to get your business sold.
- Advertising Descriptions of The Business Must be Purposely Vague
It might surprise you how incredibly difficult this is without the experience of writing dozens of business sales ads, but it is. All descriptions of the business must be descriptive enough to attract prospective buyers, but vague enough not to identify the business. Additionally, as the business owner, email addresses and phone numbers cannot be traceable back to you.
- Keep A Buffer Between You And Interested Buyers
One of the biggest advantages to the representation of a Biz-Sell Adviser is our ability to protect the identity of your business. Since we have multiple businesses listed for sale and we know the “tricks-of-the-trade” to keep information confidential, you are at a greater advantage in protecting your business by having us as a buffer between you and interested parties.
- Non-Disclosure Agreements from Interested Parties Are Mandatory
There must be a strict policy to collect signed Non-Disclosure Agreements (NDA) from all interested parties prior to sharing confidential information on the business. At the very least, these agreements act as strong motivators for prospective buyers to remain tight lipped at all times. Additionally, any employees you plan to tell of the sale should be required to sign the NDA also.
- Screen All Prospective Buyers Before Sharing Business Information
At Biz-Sell we use a rigorous process to weed out “looky-lous” and “tire-kickers” which goes a long way in preventing confidentiality breaches. By completing our Buyer Profile Questionairre, prospective buyers give us qualifying information about themselves on their business background, industries of interest, financial capacity, and more. In the end, we further protect your business by only sharing information to qualified and serious buyers.
- Do Not Disclose the Pending Sale Too Early
Once the sale of your business gets down to the final stages, you may be tempted to begin sharing the news of the pending sale with employees, friends, and family. The smart thing to do is resist that temptation and refrain from doing so. Since many business sale transactions may go through 2-3 buyers before settling on the one that closes, it is always wise to avoid notifying others until completion of the sale.
There is no way to fully protect any business sale from breaches in confidentiality. But, by taking these steps you can avoid breaches in confidentiality that can be extremely harmful to your business.