Open Or Closed Book? When Confidentiality is Paramount in Selling Your Business

Once the decision has been taken to sell your business, it's understandable that you want a quick and pain free sale. And what better way to get it sold that to make as much noise about it as possible right? Well maybe not. Many businesses rely on solid client and supplier relationships, so as much as you want to move on with your exit strategy quickly and efficiently, consider a few points that may be a stumbling block on your route to advertising your business for sale.

If your business relies solely on a client base that has been built up over time, and these relationships require stability and longevity, it goes without saying that confidentiality is paramount. Imagine the reaction of your clients if they were to learn that their trusted supplier is about to sell up.

Businesses within the service sector must consider any sale very carefully. This applies to the wording and details of any online and off-line advertising, whether any company names or trademarks should be disclosed and even the location of the business. For example, if your company is very niche orientated and is selling or supplying a unique offer in a very obscure location, it wouldn't take the world's greatest detective to work out who and what is up for sale. Think carefully about what you disclose down to the finest detail.

Businesses within the retail sector are less likely to have to concern themselves with this issue as they rely on regular foot though by the general public and don't have that "one-to-one" commitment like many business-to-business operations count on. If you run a fashion outlet or a convenience store, your customers most probably wouldn't have any concerns at all if they learned you were selling up. Simply because you do not have that kind of relationship that service sector businesses expect.

The key areas to consider when selling is that you give enough information to attract interested parties to contact you for more information. And if you feel any enquirer is serious and worth pursuing, have them discuss confidentiality and non-disclosure agreements before giving any real details. Protecting yourself when disclosing information is paramount and no matter how keen or eager someone is to learn more about your business, take every measure possible to protect yourself and the value of your business. You don't want word getting out via bad sources or loose lips.

Whether you have chosen to use a business broker or advertise a business for sale yourself, either way, there is no doubt that your business will be advertised on some of the many business for sale marketplaces online. It literally takes minutes to get an advert online, but carelessness could be costly. Sometimes the obvious areas are easy to avoid in making any catastrophic mistakes i.e posting the actual name of your business, the exact location, any product, brand or trademark names associated with your business, specifying any client names or simply giving too much detailed information when only the key points will do.

I recall one example when a small design agency was selling up. They were based in South London, U.K, so there were numerous other businesses in the area and quite honestly, a lot of other similar companies up for sale on the market. They had carefully worded their advert to ensure they sounded attractive to any potential suitors. They used terminology such as "100+ blue chip clients", "£250,000+ net profit per annum" and "Established business for over 15 years with 5+ full-time staff". All good points that will attract good buyers.

Unfortunately they made one huge error. With their advert they posted an image of the interior of their studio workspace. To any client who had visited them on a regular basis, it was instantly recognisable. Within two weeks, a client had spotted this picture and suspected their trusted design agency was up for sale. The phone calls started coming in and it was a very embarrassing situation. Word spread to other clients and before they knew it, they were putting out fires!

One slightly ill-considered decision cost them around 10 clients and £50,000 worth of annual turnover. It was a huge mistake, which essentially cut their annual turnover by 10-20%. One seemingly harmless image to try to help attract buyers by showing their swanky, contemporary office space cost them big time. Before they could do anything to stop the spread of rumours, competitors heard the news and the rumours went out of control. This mistake is a common one so as tempting as it is to make your online or offline business for sale advert attractive by adding pictures, videos, download files and client lists, think twice!

Remember, your advertisement only needs to detail the key facts because any potential buyer wants to know just the bare basic facts. The type of business on sale, it's general location, size of operation, turnover and ultimately profit. Essentially they need to know if their investment will make a return so don't get carried away with the decoration of adding too much detail as it could cost you so much more than you bargained for.

Good luck with your sale.

Simon Burge, Article Team, Simply.Biz
Website: www.simplybusinessesforsale.com
Follow us at: http://twitter.com/simply_biz

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All information and articles published on this page and subsequent pages on this website by the author should not be treated as professional advise or as a comprehensive directive on how to sell or buy a business. These articles are only published as guidance and should not form any basis on which to sell or buy a business and should not be treated as professional or legal advice under any circumstances.

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