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5 Tips For Keeping Your Business Sale Confidential

When selling your company, it is crucial for the health of the business and its future that the sale remain confidential. If your customers, vendors or employees learn it is for sale, it could have a negative impact on value.  Learning of a business sale may encourage customers to replace your product or service, employees to look for more secure employment, and vendors to demand payment of invoices.   If the value of your business is impacted, you will lose negotiating power with buyers and will not get the highest and best offer for it.  One way to protect the confidentiality during the sales process is to work with a business advisor, who will work on your behalf, use best practices, and allow you to continue to run your business.  Here are some tips we share with sellers on  keeping a sale confidential.

1. Don't mention the name of the business in the listing

There is a balancing act in getting your business information in the hands of qualified buyers while maintaining confidentiality.  Our first suggestion is to use a "blind listing".  Create an online business listing profile that has enough information to generate interest, without giving away the business' identity .  Buyers want to know the industry, business description, size, sales price, cash flow, general location, number of employees and whether or not the sale includes real estate.  While building out your listing, try to put yourself in the position of a prospective buyer and ask yourself whether certain details would expose your business's identity. Transworld's collection of searchable listings offer good examples of blind listings. 

2. Work with a Business Advisor

As with other strategies for maintaining confidentiality when selling your business, working with a business advisor can not only help you maintain confidentiality, it will help you position your business in the best possible light for the highest and best offer.  Business advisors typically act as a central hub for buyers, offering multiple listings buyers can browse, ensuring sellers get the exposure to qualified buyers while maintaining confidentiality. Business advisors also work with hundreds of buyers that may not regularly search the listing sites, so can suggest your business to the right ones.  

3. Qualify prospective buyers

Does the buyer have experience in your industry?  Can they get financing?  Do they have money to put down?  What is the buyer's goal?  Are they serious or just curious?  In order to sell your business quietly and quickly, it is important to get the information to the right buyers. Sharing information with more people than necessary isn't helpful. Transworld Minnesota limits the amount of information given to prospective buyers by sharing it in stages behind password protected portals.  By sharing information in stages, it helps weed out those that are just curious.  If a buyer clearly cannot afford to purchase your business, there is no need to take the next step of sharing more information or revealing the business' identity.

4. Use a confidentiality agreement

A confidentiality agreement, also known as a non-disclosure agreement (NDA), is a legal document buyers must sign before learning the business name. This critical document outlines your terms of confidentiality in detail, ensuring that prospective buyers who sign it will not reveal your intent to sell or any other sensitive information related to your business. Working with an experienced business advisor will ensure that you go into negotiations with a carefully crafted confidentiality agreement.

5. Knowing when and how much, information to provide

There are stages to every transaction and it is crucial to give out limited information at each stage.  As a buyer goes through the purchase process, they will ask questions about the business.  Knowing which questions to answer and which to put off is very important for the seller.  We suggest answering questions pertinent to a buying decision, but save answers that will give too much of the business' process and procedure away too soon.  Business owners often like to talk about their business because they are proud of their accomplishments, but sharing too much too soon could hurt their ability to negotiate.  Often times the most sensitive information will not be disclosed until the due diligence stage, once a contract has been negotiated and signed.  In extreme cases, some information can be held to post-closing, such as customer names.

Contact a Business Advisor

In order to utilize these tips conveniently and effectively, contact a business advisor. Business advisors like Transworld, which maintains one of the strictest privacy policies in the business, will keep your sale confidential at every step, offer the utmost expertise in valuing your business, and ensure that you get the best price possible.

Lauren Altschuler
Lauren Altschuler
I assist buyers and sellers of privately held businesses in the buying and selling process. We help value your business for the best price, advertise it confidentially to qualified buyers, handle buyer interviews, discussions, negotiations and facilitate the due diligence investigation and the sale of the business.

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Our Sellers except us to achieve the highest and best offer for their business while taking the least amount of their time away from it as possible. That is because the absolute best use of their time is to continue to run and grow the company.  If revenue or profits begin to decline, buyers will walk away or decrease their offer. Transworld's philosophy can be summed up in a ten step, how-to strategy that culminates with the sale of a company. This proven method has been used to sell hundreds of businesses.  Here are the steps. Step1 Comprehensive Business Analysis and Feedback As your business broker, the first thing in our how-to strategy is to analyze your operation, finances, market potential and industry trends. We take that information and advise you on steps to prepare your business for sale, and  generate a business profile that represents your company in the most attractive way possible. Step2 Sale Structure We identify the best possible price range to sell your company. This is based on solid facts, the condition of the market, projected growth, sales potential and the sale of similar businesses within your industry. Transworld’s experts apply sophisticated, time-proven valuation techniques to ensure that your price is appropriate for the current market condition. The price must not be too high or too low. Yet, it must represent an attractive investment potential for the buyer. Step3 Confidentially Network The Business For Sale During the selling process, we utilize the latest technology to present your company to other business brokers and strategic buyers all over the world. This greatly multiplies the effort in your favor. With Transworld Business Advisors, you have literally thousands of industry professionals confidentially representing your company to buyers.   Step4 Confidentially Advertise To Buyers Our aggressive marketing program ensures your confidentiality and provides maximum exposure for your company. Your listing is placed in various industry databases, Internet sites, and publications which are constantly updated. We spend more money in advertising and marketing for buyers than anyone else in our industry. Step5 Control The Information Flow We organize all necessary documentation and release information only as needed. We use limited information when advertising to maintain confidentiality. Buyers are pre-qualified and required to execute a confidentiality agreement before receiving any sensitive business information. Step6 Create Competition For Your Company We attract thousands of buyers, creating competition for your business. Buyers are qualified for financial ability to meet the offer, and we engage you with only the most qualified buyers. Once you meet the best of the buyers, we urge them to prepare and present all offers. We can continue to engage potential buyers on your behalf as negotiation on an offer is in process and have another interested party ready to go should a buyer change their mind. Step7 We Negotiate For You To Achieve The Best Price Appropriate negotiation is crucial to achieving your best price and terms. We have the expertise to establish sound and resourceful negotiating techniques on your behalf. Transworld has trained all of its agents in the art of negotiating through curriculum that we have created specifically for our industry. Never negotiate without planning, expertise, or from a position of weakness. Step8 We Provide Exceptional Support To You Through The Due Diligence Process We take pride in our exceptional service. Only half of the job is finding the right buyer who will pay your price and meet your terms. The other half is getting that buyer to the closing table. We quarterback the deal, work with the accountants, lawyers, banks, landlords, and other third parties that could jeopardize the success of the transaction. We realize that you depend on us to guide you through the sale of your business. We make the transition simple and easy for you. We know when an opportunity for you may arise and are always there to take advantage of it. We also know when someone is trying to kill your deal or is being unreasonable and how to handle those situations. Step9 We Are There From Beginning To The Closing We help manage all administrative procedures, licenses, inventory counts and lease assignments that may be required. Transworld works closely with your advisors to ensure a smooth transition. Using the latest technology, we strive to be ready to work on your behalf to get the deal done! Step10 We Are There For The Transitional Phase And Beyond! Because we are in the business community, you may want to consult us from time to time after the sale. We will provide you with the assistance after closing. Transworld will always remain in your corner! Schedule Consultation Now

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