Selling a business is unlike selling anything else.

Selling a business is a strategic process. The goal is not to let everyone know the Business is for sale – as is often the case when selling a house, car or many other products or services. Selling a Business is very different and a confidential, targeted, strategic approach is required. Maintaining confidentiality during the transaction process is not only important to the Business owner but also to the serious, strategic prospective purchaser.

Why is Confidentiality so Important

A. Employees:

If an employee learns that the Business is for Sale they may become concerned for their long term stability, and could start looking elsewhere for employment. Minimizing the threat of the “employee flight risk” is critically important given that employees are one of any Business’s strongest assets and also one of the key considerations a Purchaser has when considering a business acquisition (whether the employees are likely to remain working with the new ownership). If the employees incorrectly believe the new ownership is likely to purge the company of some of its employees, they may consider finding another employer. It is very important to maintain confidentiality and control the marketing message – who receives it and

what information is received and when it is released. If you lose one or two of your key employee, how attractive will your company be to prospective purchasers?

B. Customers

If during marketing, you loses control of the communication and the message that you are selling gets out into the market, customers may lose confidence and consider to purchase elsewhere. Customers like anyone else in business value stability, reliability and long-term relationships. If a customer somehow learns about the sale before it is completed and before the new ownership is introduced and their plans are communicated - some customers may naturally question what changes there may be after the sale? What happens to a Business’s value if a business loses 1 or 2 of their top customers.

C. Competition

If the competition discovers an industry participant is for sale, and they have not signed a confidentiality agreement - they may try and use this information to their advantage - with your employees, customers, and suppliers.

If news of your business’s sale gets out into the market and that information is incorrect, it can also impact your competition and reputation. Controlling the transaction process and release of information, requires maintaining confidentiality and that includes having all prospective purchasers sign confidentiality agreements.

Ostir Business Brokers are experts at selling businesses confidentially.

Marketing a business strategically adds complexity, but it is critically important to maintaining confidentiality throughout the transaction process. Marketing on a confidential basis requires a network of prospective purchasers and professional advisors, non disclosure agreements. Experience and expertise is required to develop an effective and professional marketing strategy that will best position business the Business without employees, competitors, and suppliers knowing that the business for sale.