Why Confidentiality Is Important When Selling A Business
Selling a business can be a sensitive matter involving sensitive information. Unlike selling your home, you wouldn’t want to put a for sale sign in front of your store or office because that could lead to decreased revenue in the interim for your business. Confidentiality while selling and transitioning ownership is a must.
You have more leniency on privacy if you plan to transfer ownership internally to a family member, partner, or senior manager after you retire. However, if you’re selling to a complete outsider, things can be quite different. At Alliant, confidentiality is our constant priority, which is why we successfully help our clients get the maximum value for their businesses.
Maintain Confidentiality Until You Get To Know The New Owner
Since the phase of selling and transforming ownership can take time, you’ll want to get to know the potential new owner and their objectives for your business. This will allow you to properly inform your employees and customers about the transition at an appropriate time.
Having the answer to what might change or remain the same provides reassurance to employees and clients who might otherwise panic and leave. Yes, at some point as the closing of the sale is imminent and it’s a given that the new owner is taking over, you will have to let your employees and customers know, but waiting until the right time to do so is of the utmost importance.
Maintain Confidentiality To Keep Up Employee Morale
As a business is transferring hands, you want to make sure your employees stay focused and committed to your business. You want to make things easier for the new owner to step in and hit the ground running. Letting the new owner know the current team of employees are stable, hard workers can increase their confidence in buying your business. Inevitably, as with any change, some employees may not choose to transition with a new owner, but regardless, you will want to put your best foot forward in presenting your business and employees.
Maintain Confidentiality To Protect Sensitive Information
During due diligence in the buying process, a lot of information will be exposed to buyers such as:
- Specific financial figures
- Lease and/or rental agreements
- Contract agreements with suppliers
- Names of employees, customers, or contractors
It could be problematic if information were to leak out, and there are certain things that shouldn’t be disclosed if the potential buyer backs out. A non-disclosure agreement can protect you. It is important to have key employees and your business broker sign it as well as the potential buyer.
The bottom line is selling a business is a very big move that requires keeping confidentiality a primary focus. With our team of business brokers at Alliant, we will keep your business listing private and connect you with buyers without notifying any of your customers or competitors.
Want help selling your business confidentially? Contact us today to learn more about our process and how we’ve sold over $125,000,000 in business sales since 2005.