Business Brokers NJ: Article About Keeping Your Business Sale Confidential
Confidentiality is often an important factor in the successful sale of a business. If your customer base, your experienced employees or your market share are part of your business package, preserving their value helps you get a good price for your company. In many cases, some of these value-adding aspects of your business may dwindle once word of a sale becomes public knowledge.
Your business brokers play a critical role in maintaining confidentiality while your business is on the market. They act as liaisons between qualified buyers and your company, and they draft and manage confidentiality agreements so that you can maintain your privacy. They also nimbly handle the marketing your business without publicizing your plans. If confidentiality is a concern, discuss it with your business brokers NJ before signing a listing agreement.
A confidentiality agreement is designed to keep your selling plans strictly private. Your business broker drafts a document that prohibits prospective buyers from sharing any of the information they learn in looking over your selling memorandum or term sheet. Interested parties must sign this agreement prior to receiving any information about your business. The broker will also schedule any facilities tours to take place after hours to avoid arousing the suspicion of your staff members.
A breach of confidentiality before you are ready to announce a sale may have drastic consequences. For example, news that you are trying to sell the business may put your vendors in a panic, and they may call in your outstanding balances to protect their firms from potential losses once you have completed your sale.
Have a question regarding corporate advisory services or business sales? Please ask the business brokers from Selby Associates of Cherry Hill NJ today.
This could severely affect your cash flow and make your business less attractive to a purchaser.
Another possible consequence of a news leak could the loss of employees. They may have heard a rumor that a new owner is bringing in new staff anyway. Losing even part of your workforce in this way could cripple your production line and your all-important bottom line.
If your customers get wind of a pending sale before you are ready to announce it, they may lose their trust in your brand and take their business elsewhere. They might believe that you will not honor product warranties if you are selling out. Because your client list is a valuable business asset, losing clients due to a breach of confidentiality is certain to lower the value of your business package.
Some owners opt for full disclosure of their plans to sell from the start, and openly address the concerns of employees, customers and suppliers before negative consequences result. In other situations, owners opt to preserve the value of their offering by keeping their sale plans confidential with the help of their professional business broker.