Confidentiality Is Important While Selling the Business

Confidentiality When Selling Your Business

Confidentiality When Selling Your Business

When selling a business, confidentiality is often an important part of the process. Typically, business owners do not want to advertise that their business is for sale because it can lead to employees leaving the business or customers deciding to switch to your competitors.

In order to keep the sale of the business confidential, it is important that you engage the services of an experienced business broker. A business broker will protect the identity of the company and contact only owner approved buyers through a blind profile – a document describing the company without revealing its identity.

Business brokers are skilled at confidentially marketing a business; they will list your business using a generic description that will not give away its identity. Anyone who would like to receive more detailed information about the business for sale will then be directed to sign a non-disclosure agreement (NDA), which holds the inquirer liable in the event that sensitive information is disclosed to a third party. Only interested buyers that you approve will receive confidential information about your business.

Your broker will prepare a document called a confidential information memorandum, or CIM, which is a document used in mergers and acquisitions to convey important information about a business that’s for sale. This document usually includes information about the business’ operations, financial statements, management team, and other data that will be important to an interested buyer. Buyers must sign the non-disclosure agreement in order to receive the confidential information memorandum.

Once a buyer is found, your business broker will help you negotiate the terms of the sale. Any due diligence, such as a visit to the business, will be conducted in a confidential manner. They will ensure that the transaction stays confidential throughout the negotiating process, so that you do not have to worry about the identity of your business being exposed to the public.

If you’d like to learn more about preparing your business for an exit, or would like assistance navigating an exit, contact us today!