Why is Confidentiality Important during a Business Sale?
When selling your business, keeping the process confidential can prove imperative. Why is confidentiality so important? In a few words, it reduces the risk.
It is important to take into consideration the people, other than you as the business owner that may be affected when selling your business. Thinking about who will gain or lose from this sale, let’s consider these groups; customers and clients, employees, competitors, vendors and creditors.
Your Customers and Clients
We, as human, are creatures of habit. Many people use the same supplier for products and services year after year. Your customers or clients may find issue if they discover a new owner will be coming in and potentially changing the quality of service or product that they were used to. Your once loyal clientele may decide to find a new supplier or place of service long before a new owner, and his or her potential changes take effect. This in turn can weaken your business momentum along with its value.
Your Vendors and Creditors
Sometimes when a lender or vendor finds out that a business is for sale they will change their credit policies until the new owner is in place. If this happens, it could affect the terms of the loan payment, such as when payments are due, and thus affect the working capital management, or day-to-day cash flow of the business.
Another worry a business owner may have, should the news of a sale be released, is what will the employees do. When an employee hears that an owner is selling the business they often think, “What will happen to me?” This can cause unneeded panic and can move the employee’s focus away from the work at hand. Although, the majority of buyers will want to speak with employees before the sale is finalized to get a feel for the environment, when selling your business it is best to operate with employees doing business as usual with the information of the sale being disclosed at the last moment. If the employees know ahead of time they may quit or otherwise disrupt the work environment, leaving the business short staffed and struggling to train new associates all while working to finalize the sale of the business.
Last, but certainly not least, is a concern that your business’ competitors will find out that you are selling your business. When your focus is on selling the business, attention may slip from advertising and the bringing in of new customers. Should this occur, your competitors might take this opportunity to gain an upper hand and potentially use this as leverage to bring customers in their doors diverting them away from your business.
Worried about confidentiality when selling your business?
All of this stress and headache can be avoided by working with a Certified Business Broker. Once you’ve decided that selling your business is your best exit strategy, contact a reputable Florida Certified Business Broker to keep the details of your business transaction confidential.
Cress V. Diglio, Florida Certified Business Broker
Whether you are looking to buy a business, sell your business or merge with another business, Florida Certified Business Broker Cress V. Diglio has the experience to assist you in all facets of the transaction. Call Cress today for complete transaction support and expertise, 888-984-4208, or visit https://floridacertifiedbusinessbroker.com.