When you think of confidentiality, you might easily understand how it factors into patient relationships with medical professionals.
But why is confidentiality important during the sale of a business?
It’s advantageous for a business owner to keep the sale of their company a secret for many reasons. If word got out to key customers, competitors, or employees, it could negatively impact the company’s reputation.
If you’re selling your business, maintaining confidentiality should be a priority. Here’s how you can do that:
Signing a NDA (Non-disclosure Agreement)
A NDA is a legally binding contract that protects the information exchanged between parties.
Under no circumstances should any prospects receive a single piece of identifying information about a business for sale until they have a signed NDA. Once a strong lead is found, they must sign a Non-Disclosure Agreement before the proceedings continue.
Advertising the Sale Anonymously
How can you attract buyers to your business without revealing too much about what it is?
Your goal is to make the ad enticing, but not so revealing that if an employee or competitor read it, that they’d be able to identify it.
A business broker can help you market your business anonymously. They’ll write ads that describe your products/services but are vague enough that they don’t reveal the company’s location or industry.
Navigating this process can be tricky, but with a bit of planning and tact, it can be done successfully.
Do not tell the employees about the sale until it is 100% completed. If the deal falls through at the last minute, it could be stressful for your entire team.
Once the sale is finalized, gather all the employees and tell them together (or in groups) about the sale. Do your best to ensure that your staff hears the news from you directly.
Don’t give employees the time to imagine what the new owner will be like. For example, imagine if you told your employees about the sale on Friday, but they didn’t meet the new owner until Monday—they’d have all weekend to stress about what might happen! Once they meet the new owner, they’ll almost certainly be more relaxed.
So, within one hour of sharing the news, arrange for them to meet the new owner.
As they say, don’t count your chickens before they hatch—wait until the deal is finished before notifying your customers.
If word gets out that your business is for sale before a deal is finalized, it may cost you a key customer. In turn, this could threaten a deal with a potential buyer.
It helps to tell customers that the previous owner will be in contact during the transition, and will be involved financially if there is any portion of seller-financing on the deal.
We recommend not to notify your customers until after the deal is finalized.
To navigate the intricacies of confidentiality, it’s advisable to work with a business broker. They can help you keep the sale anonymous and still attract high-quality leads.
Selling your business is no small task. With a business broker, you can close a deal that both parties are happy with. Jason Brice is a Vancouver business broker with experience in every industry. Call today for a free consultation!