A failure to maintain secrecy while attempting to sell your business can lead to major negative impacts on the daily operation of the business, and the sale itself. While confidentiality has always been an essential part of the sale of a business, in today’s business climate it is crucial. Due to COVID, many businesses were forced to shut down or scale back businesses and caused other business owners to question if now is the right time to sell. For some business owners, now is a great time to sell. There remain potential buyers interested in finding opportunities, and the businesses who have survived the past few months have even more appeal. Buyers are interested in bottom-line profits and though your business may have taken a hit over the past quarter, it’s long term value should be considered.
Whether you wish to sell in the coming months or within the next year, confidentiality must remain an important consideration. That’s why as part of the Alliant process, we require that each potential buyer sign a Confidentiality Agreement prior to our releasing any information about your business.
Here’s how a lack of confidentiality can impact the sale:
- If your competitors get wind that your business is for sale, they will swoop down on your customers like vultures. Your customer’s fear of the unknown will create apprehension, and might lead to you losing clients.
- Your employees’ fear of new management, or of losing their jobs, could prompt them to start searching for another job opportunity.
- Suppliers and vendors may decide to change their terms, which could impact your cash flow
When sellers of businesses attempt to sell on their own, they are at a much higher risk of disclosing information that would reveal the sale. Normally a seller has to provide phone numbers, email addresses, physical addresses and other critical and identifying information. Even your home phone number could disclose who you are, and the business you own.
The most effective way to protect the secrecy of the transaction is to work with a professional and experienced business broker. An experienced broker is an expert in marketing and advertising your business without your competition, vendors, employees, or anyone else finding out. The broker can shield your business’s identity by requiring that all interested parties sign a confidentiality agreement and are properly screened.