How to Maintain Confidentiality During the Selling Process
When selling your business, confidentiality is more than just a preference. It’s essential to ensure the deal goes smoothly and preserve the value of your business, both now and after the sale. Having word of the sale get out to employees, customers, competitors, or creditors could hurt your business and possibly kill the deal.
But striking a balance between promoting your business and maintaining confidentiality can be incredibly difficult, especially if you’re working alone or selling a business for the first time. That’s where professionals like Sunbelt Business Brokers come in — they can help you find the right balance and successfully sell your business without compromising it.
As you work with your business broker, here are a few things to keep in mind that will help you maintain confidentiality.
Establish a Confidentiality Plan
If you’re planning on selling your business, you should develop a confidentiality plan with your broker. It doesn’t have to be overly complicated, but it’s crucial for protecting sensitive business information and your company’s value.
Here are the four critical parts of a confidentiality plan:
- Prepare nondisclosure agreements (NDAs) for prospective buyers to sign
- Keep your name and contact information out of advertisements
- Screen potential buyers
- Know what you’ll say if there’s an information leak
The goal of each step of your plan is the same: to protect your business.
Appoint a Trusted Intermediary
You have a business to run. As such, carrying out your confidentiality plan might be a task best left to professionals like those at Sunbelt Business Brokers, who will have the tools, reputation, and experience to keep your transaction confidential. We even have a business valuation calculator that can prepare you to sell your business.
NDAs — Protecting Confidential Information
Confidentiality agreements come in many forms. An NDA is one. Your NDA should be specific to the sale of your business, providing clear obligations, consequences, definitions, and durations, with a clear clause regarding confidentiality. As you can imagine, these complicated legal documents must be created and executed with precise care and expertise. A business broker can help you with these essential documents and protect your company.
Limit Information Disclosure
Keep sensitive information between you and the professionals you hire, only advertise the type of industry and business for sale, provide company descriptions after NDAs have been signed, and wait until the buyer has signed a letter of intent to release details about the business.
Prep Employees on Confidentiality
Prepare employees involved in the deal with responses they can use in the event of an information leak. Doing so can keep vital information from getting out in the open before the time is right.
Manage External Communication
It’s important to keep in mind that word might get out during the process of selling your business. If that happens, here are a few ways to handle the situation:
- Control the narrative
- Ignore or deflect questions
- Be forthcoming with employees
You must be prepared for such a situation and act quickly with your broker if it occurs, as a leak can create problems both inside and outside your company.
Monitor Online for Potential Leaks
Assign someone to keep an eye on anything being said online about selling your business and have them report back to you. That way, you can formulate a plan to limit the spread of confidential information and mitigate the potential damage. A business broker can make recommendations for ways to monitor these leaks and how to take action if they occur.
Due Diligence
While buyers are looking into your company, you also must investigate them as part of your efforts to maintain confidentiality. You need to ensure that prospective buyers have the credit, background, and assets to complete the deal and that a particular interested party isn’t posing as a buyer to gain a competitive edge.
Even if you’re a seasoned business owner, it’s all too easy to fall victim to shady buyer practices or even scams. That’s why it’s essential to work with a qualified professional from Sunbelt Business Brokers to help protect the integrity and profitability of the sale.
Get Help Maintaining Your Confidentiality
Maintaining confidentiality throughout the process can be incredibly difficult if you’re attempting to manage the sale alone. But Sunbelt Business Brokers has proven experience and a hard-earned industry reputation for keeping information about business sales confidential.
Contact us today to learn how we can help you maintain confidentiality while selling your business.