The question boils down to confidentiality. Maintaining confidentiality is critical to the business owner while they sell their business. After all, the process of selling a business typically takes several months from start to finish, which is a lot of time for the reputation or profits of a business to become marred from sale rumors.
Business owners are rightfully concerned that their business might suffer if their stakeholders, employees, customers and vendors get word that the business is for sale. Employees might jump ship, customers might start looking around at competitors, and even vendors may stop offering the best service and pricing.
The worst case scenario is that the story gets distorted, as gossip often does when it passes from person to person. All types of fiction can germinate from one little seed of inadvertent disclosure; the business is going under, the owner is having personal difficulties, or competitors are taking over their business.
As a business owner, you want to have the capacity to manage the story. You want to control who knows what and when they know it. So what should you do? Forget about listing your business on Craigslist. You might as well put a For Sale sign in the window. Instead, hire a reputable business broker. Professional business brokers understand the sensitivity of your situation and will work with you to preserve confidentiality while you sell your business.
From the initial meeting all the way through closing, your broker can advise you on how best to preserve confidentiality. The process can start with your first meeting:
- A professional business broker will have a private office available to host meetings so your staff and customers don't see you meeting with an anonymous stranger.
- A professional business broker knows how to market your business for sale with enough information to make the opportunity look enticing, but without giving away the identity of the business.
- A professional business broker can do the work of separating real buyers from the inevitable "tire-kickers" who bring nothing but their curiosity to the table.
- Once your broker has identified a viable potential buyer, he will require that the candidate executes a Non-Disclosure Agreement before he reveals the identity of the business or any operational or financial details. An NDA is a legally binding agreement that requires the buyer to hold all information received about a business for sale in strict confidence or face legal recourse for a breach of that confidence.
And once a deal is reached, your professional business broker can guide you through the steps from offer to sales, contract and closing, handling many of the details for you so that you can maintain business-as-usual until the deal is consummated.
At Transworld, we have licensed brokers who are members of CABI (Colorado Association of Business Intermediaries) and have pledged to work to the highest standards of professionalism. Maintaining your confidentiality is one of our most important duties. For more informationon how we can support the sale of your business visit our website or schedule a consultation with one of our brokers!
Ross Haymes is a Business Broker at Transworld. He draws on his decades of experience in corporate finance and entrepreneurship to guide buyers and sellers toward their goals. During his 20-year career with NYSE-listed Burlington Industries, Ross served as an economist before becoming Investor Relations Director. Upon retirement, Ross realized his own dream of becoming a small business owner. In his role at Transworld, he works directly with business owners to orchestrate, step-by-step, the buying, selling and growth of their companies.