When you’re preparing to sell your business you may think about presenting it in the best light, getting a good price and the legalities of signing it over. But have you thought about keeping the whole idea a secret?
If your plans to sell become known to the wider world, this could have repercussions on the sale. Rumours of a sale can tempt lenders and suppliers to change their terms, make customers look elsewhere and cause employees to leave; any of which can cause your sale price to go down.
There are steps you can take yourself to keep your plans quiet, but for true confidentiality, consider a business broker.
Business brokers are experienced in keeping confidentiality during every stage of the sale. From the way your business is marketed, to meeting potential buyers and through the offer and finally signing papers, a broker will work to ensure you get the best price.
That means taking all the necessary steps to keep your business sale a secret.
Marketing
It may seem like advertising your business would be difficult without naming your business. How can a buyer know they want to purchase without knowing what they’re buying?
Brokers are experienced in showing your business in the best possible light whilst not revealing exactly who you are. The business is advertised in general terms. For example, High Street Hairstyles would be referred to as “a popular hair salon on a main road”.
Details like income and expenses, customers, suppliers and employees are portrayed accurately, but vaguely at this stage of the process, allowing for possible buyers to decide if they’re interested while not revealing anything about the exact business.
Qualifying Buyers
When interested buyers step forward the broker continues to protect your confidentiality. Any interested parties will be asked to sign a confidentiality agreement. This agreement stops the possible buyer discussing information with anyone else or from approaching you or your employees, suppliers and customers.
At this stage, buyers are also assessed by brokers usually through a face-to-face meeting. In this meeting, the broker will ensure the prospective buyer can afford to purchase the business and assess their suitability. Brokers will also ensure that the purchaser has no conflicts of confidentiality, such as being a customer or competitor.
This stage all moves forward with the broker talking about your business in general terms so as not to reveal identifying details.
Sales
After your broker has determined the buyer is serious, further details will be released. This does not mean all details will be released. Although a more thorough overview of financial and operational details will be given, confidentiality is still maintained. Often, information is released in stages so the broker can be sure the buyer is serious about proceeding.
If the buyer does choose to make an offer, a Sale & Purchase Agreement is drafted. The agreement will normally include a period of Due Diligence where certain details are revealed. Even at this stage, it’s possible to maintain secrecy, depending on the nature of the business.
If the buyer chooses not to go ahead with the sale, any material that they have received will be collected by the broker to be destroyed. This is assured under the confidentiality agreement signed at the beginning of the process.
Your broker will take all possible precautions to ensure secrecy is maintained during the sale of your business. Their reputation depends on it and it is often essential for a successful sale.
At every stage of the process, you should feel like your broker is dedicated to the sale of your business. A good broker will have systems and procedures in place to secure confidentiality and be able to outline those procedures for you.
For Further Information about this article, contact your nearest LINK Business Broking office at:
