Some buyers don’t understand why confidentiality is so important. Oftentimes, they have the expectation that you will open all of the guts of your business to them as soon as they sign a Non-Disclosure Agreement. Opening up your business too quickly can have all kinds of negative consequences.
This is one of the reasons that it is important to have a professional business broker help you with this process, especially the screening of buyers. Professional business brokers can save you time, money, and energy dealing with potential buyers so you can focus on continuing to grow your business.
A professional business broker will know the right time to disclose information about your company so that many destructive consequences might be eliminated. If information gets disclosed to the wrong people at the wrong time, you could be in trouble.
What if employees find out you are selling?
They could look for new jobs, which means you have to hire and train new employees.
They could be less motivated to follow your leadership.
They could be less protective of your business model.
Their performance could decrease.
What if vendors find out you are selling?
They could change the thoroughness of their service with you.
They could be less willing to negotiate prices with you.
They could spread the word to competitors that your are selling.
What if customers find out you are selling?
They might not buy goods or services from you because they might think you won’t be there to service them when needed later.
They might decide to take their business to another business that could create a lasting relationship with them.
They might spread false information about the reasons you are selling that could create negative consequences in many areas.
What if competitors find out you are selling?
They could sabotage your customer base.
They could go after your customers.
They could spread false information about your business.
There are many other reason to confidentially sell your business, not the least of which is the buyer could decide to re-create your business without actually buying yours. If you give over the wrong information too soon, the buyer could just build his/her own business and not ever pay you for yours.
So the answer to the question that buyers might ask regarding what you might be hiding is:
Nothing and everything at the same time. Transparency is essential in every acquisition, but so is timing.
If you are considering selling your business and would like help managing the process please contact us; we’d love to help