While many people compare selling a business to the sale of real estate, there is one very significant difference: Confidentiality. Think about it this way: when you are selling your house, you put a big sign out in front of your house in order to attract as much attention as possible. If you did the same thing with your business, you create conditions of uncertainty that could negatively impact your bottom line.
So what could be the consequences of people finding out the business is up for sale?
- Employees get nervous, and some may even leave: Employees are an extremely valuable asset to your company, and knowing change is on the horizon, may cause some individuals to leave. They worry they will be losing their jobs, or the new owner will bring in their own team. Even if you were to reassure them, some may still try to “take control of their lives” and seek a different position. Additionally, you lose valuable continuity and business knowledge that buyers are looking for.
- Customers begin to wonder and may seek similar services/products elsewhere: Your customers may assume the reason for selling is problems within the business. This could lead them to seek out another company that can provide them with services similar to yours. Or customers may be concerned the business won’t be there to stand behind it’s work or honor any warranties.
- Competitors move in: Once your competitors know you are selling your business, they may use that as leverage to steal away your customers.
- Vendors and creditors tighten terms: If you work with vendors, you may find that previous contract terms becoming more strict. The same thing could happen with creditors, with debts and payments being called due.
All of these consequences can significantly negatively impact the sale of your business. They not only result in a lower asking price asking price, it could also make your business unappealing to potential business buyers. A potential buyer feels too much uncertainty means greater risk.
As you can see, confidentiality is critically important to you as a Business Owner and to the New Owner as well!
How does Gateway MA keep your confidentiality a top priority?
Gateway’s Brokers and Intermediaries are highly skilled at protecting your proprietary information throughout the Business Selling process. Any and all inquiries made are kept in strict confidence, and our representatives are available after hours and on weekends for meetings. Additionally, a Gateway Broker or Intermediary has the ability to vet all buyers to be sure that they have the skills and financial capabilities to buy and successfully operate your business. After determining that they have the skills and resources needed, a potential business buyer must sign a Confidentiality Agreement before receiving the Confidential Business Review for your business. As the process progresses, Buyer-Seller meetings are scheduled after-hours so that no employees or customers are on-site. As the transaction nears closing day, outside parties, such as bankers, appraisers, surveyors, or licensing agencies may need to be brought into the transaction. All outside parties are instructed on the confidential nature of the transaction. We cannot control the actions of outside parties and their approvals many be necessary to get the transaction finalized. However, Gateway does everything in it’s power to stress and enforce strict confidentiality.