There are two key ingredients when it comes to selling a business: professionalism and confidentiality. If either of these two ingredients are lacking, then you’ll probably run into problems. Sadly, many sellers see their deals fall apart due to a breach of confidentiality. You don’t want to be one of them.
Many business owners want to sell their business to fund their dream retirement, but don’t know where to start.
I’ve used these 5 Critical Questions to help my clients prepare and start increasing their business value.
A breach in confidentiality can negatively impact everyone from suppliers and vendors to creditors. For example, vendors could change their terms and this, in turn, could have a major, negative impact on cash flow. There can be a chain reaction of events that spirals out of control.
Negative Outcomes of a Confidentiality Breach
The potential negative outcomes of a breach in confidentiality are numerous. For example, if employees and customers learn you are trying to sell, they could grow concerned about the future of the business. Employees could begin to worry about the security of their jobs and start looking for work elsewhere. This situation could lead to disastrous changes in management and the loss of key employees. Likewise, customers, fearing instability with your business, could decide to take their business elsewhere, leading to revenue problems.
Yet another complicating factor comes in the form of the competition. If the competition hears your business is up for sale, they could sense “blood in the water” and attempt to steal your customers.
And what about your selling prospects? Ultimately, a confidentiality breach could give potential buyers cold feet.
How to Protect Confidentiality
There are many reasons to believe protecting confidentiality is a must. One of the single best ways to ensure confidentiality is maintained is to opt for an experienced and proven merger and acquisition advisor. M&A advisors understand the tremendous value of keeping things under wraps and work hard to ensure confidentiality is maintained.
It may be tempting to try and sell your business on your own, but it is vital to understand that doing so can damage your business’ reputation. A good M&A advisor knows how to shield your business from breaches of confidentiality. By working with an M&A advisor, like those at EastWind Business Solutions, not only can you be assured that confidentiality agreements are signed and taken seriously, but you can also be confident prospective buyers are vetted and fully pre-qualified. Many interested parties who respond to “business for sale” ads are not qualified to make the purchase. Why would you want to risk giving away key details to these parties?
Failing to maintain confidentiality about the goal of selling your business can cost you valuable employees, customers, suppliers, your niche in the marketplace, and even the ability to make that desired sale. A merger and acquisition advisor will work diligently to ensure confidentiality is maintained so you can safeguard the key relationships that make your business successful. By taking this important step to maintain confidentiality, you will be in a better position to ultimately make the kind of sale you are hoping for.