Posted 12-19-2022 3:20 pm by
Maintaining confidentiality goes hand in hand with the famous slogan that “what happens in Vegas, stays in Vegas.” Las Vegas is known for being a city that keeps your secrets. As a business broker in Las Vegas, I understand that maintaining confidentiality is more important than ever when it comes to selling your business.
If your employees find out about the business sale before closing happens, they may get scared and begin searching for jobs elsewhere. If your competitors find out about the business sale before closing happens, it may encourage them to snatch your customers away from you. If your suppliers find out about the business sale before closing happens, it may cause problems with the relationship.
To keep the sale of the business confidential, here are four guidelines to follow:
1. Use the right type of broker. It can be difficult to maintain confidentiality when the business owner is running the business and trying to sell it at the same time, which is why many business owners choose to hire a broker. Unfortunately, hiring the wrong broker can be just as detrimental. A lot of brokers who sell residential or commercial real estate are not trained to maintain confidentiality. In fact, putting up a “For Sale” sign in front of the property is an important advertising source for many brokers. To properly maintain confidentiality of the business sale, you should use an experienced business broker who deals with highly confidential transactions every day.
2. Use non-disclosure agreements. An important strategy in maintaining confidentiality is to have legal recourse should potential buyers disclose the fact that your business is for sale. Prior to releasing information that identifies which business is for sale, all potential buyers should sign a confidentiality and non-disclosure agreement.
3. Advertise confidentially. To inform potential buyers that a business purchase opportunity is available, the advertising must be specific enough to make the opportunity attractive, yet vague enough that potential buyers cannot discern which business is for sale. Success in confidential advertisement requires research into the marketplace, knowledge of the types of information that should and should not be disclosed, and an understanding of the business operations.
4. Qualify buyers. Due to the confidential nature of business sales, all buyers should go through a qualification process prior to finding out the name and address of the business for sale. Buyers also need to be trained on confidentiality protocols during site visits and be warned about the consequences of violation so that maximum confidentiality can be maintained.
Sometimes business buyers ask if they can meet the key employees prior to closing of the sale. As a business broker who typically represents the seller, I do my best to discourage buyers from meeting the employees prior to closing. The reason is simple: deals fall apart or get delayed for many reasons. Meeting the employees too early only causes anxiety on the part of the employees, and harms the business if the employees decide to leave. When I buy a business myself, I do not meet the employees until the day after closing. Hearing my story of how I have successfully purchased and grown multiple companies without meeting the employees in advance is often enough to provide business buyers the confidence they need to close the sale without meeting the employees in advance.
Advantage Commercial Brokers has decades of experience maintaining confidentiality of business sales. To discuss the potential sale of your business confidentially, please contact us below.
Aaron Muller, President of Advantage Commercial Brokers, has personally sold over 200 companies for his clients as a business broker. Recognized as an Industry Expert by the Business Brokerage Press, Aaron has over 20 years of experience selling companies with sale prices ranging from $100,000 to over $50 million. Aaron is an Inc. 500 entrepreneur, having built one of America’s fastest growing private companies. Aaron owns multiple companies today, and is the #1 international bestselling author of The Lifestyle Business Owner: How to Buy a Business, Grow Your Profits, and Make It Run Without You, available on Amazon in Kindle, audiobook, and paperback. Contact Aaron at (702) 829-6373 or aaron@acbrokersinc.com for a confidential, complimentary consultation for business sellers in the Las Vegas area.
