For business sellers, maintaining confidentiality is a crucial part of the sale process. If creditors, competitors, customers, or employees find out that there’s an impending sale, it could adversely affect the business’ momentum and its value. Working with an experienced, qualified M&A advisor who knows how to navigate a sale while maintaining strict confidentiality reduces these risks and gives you peace of mind. In this blog, you’ll learn more about the steps to take to keep a business sale confidential.
Use Blind Listings and Ads or Not At All
When CGK handles the sale, many of our engagements never hit a website. We go directly to those companies and individuals we’ve identified as the best buyers. In some cases, a confidential web posting may also ensure a healthy number of qualified buyers. At CGK, we also advise clients against using the business’ name until buyers are qualified and have signed a confidentiality agreement. Businesses should be advertised based on their strength and nature, rather than their names, and responses should be directed to the advisor’s confidential email address. This step allows sellers to save money and time by following up only with the most qualified prospects.
Execute an NDA
It’s required to have the buyer sign an NDA (non-disclosure agreement) before they begin working with the seller’s M&A advisor. These agreements are rather broad, and they cover how much info can be shared with buyers’ partners, lawyers, accountants, and advisers. Buyers are required to work with the M&A advisor rather than going directly to the seller, which offers many benefits, especially where confidentiality is concerned.
A mergers and acquisitions advisor will screen potential buyers as a way of protecting the seller’s confidentiality. The firm has proprietary buyer verification methods, and the team takes the entire process seriously. If a buyer doesn’t have a resume or LinkedIn profile, they’re not taken seriously and they’re not qualified to buy the business.
Learn What to Expect From Your M&A Advisor
A qualified buyer would prefer for the business’s information to stay private because they like knowing that the owner has taken steps to protect sensitive information. Buyers should be ready to go through the proven process, and if they seem to be in a rush, they’ll likely be eliminated from the buyer pool. While it’s important for the seller to work closely with the broker or advisor, it’s vital for buyers as well.
Meet the Buyer In Person
The final step in the initial selling process is for your M&A advisor to schedule an in-person meeting between the buyer and seller. Ideally, such meetings are held after hours at the business or in the broker’s offices; they’re rarely done over the phone. Sellers typically take in-person buyers more seriously, and buyers will get the chance to learn whether the seller will help them during the training and transition phase.
The Final Word
As sellers review the steps listed above, they may be nervous about the process, especially if they’ve never gone through it before. An effective M&A advisor or business broker will help both parties in a way that keeps confidentiality throughout the entire process. CGK Business Sales has successfully handled many transactions over the years, and the team has an extensive knowledge base on how to successfully market and sell businesses. Call or email us today to schedule a consultation or visit our website for more details.