Selling a business is a complex process, especially if you want to keep it private. Doing this requires a careful approach to listing the company, finding clients, and negotiating the deal. Many business owners don’t have enough time and experience to do this on their own so they delegate the task to business brokers.
In reality, selling a business privately is possible without making immense efforts. A private sale is a preferred method for these types of deals so plenty of helpful information is available. Let’s discuss a few things to consider when selling a company and keeping it private.
Reasons to Sell a Business Privately
Key reasons to sell a business privately include:
- A sale is always a complex process with unclear consequences. When your staff learns about the impending sale, it may decide to quit. Since they don’t know your reasons for selling a business or the new owners’ plan, many employees decide to quit while they are ahead.
- When customers find out about the upcoming sale, they may decide that the business isn’t doing too well and look for other options. Losing key clients could have a negative impact on the price of your company, thus delaying or hindering the sale.
- When creditors learn about the upcoming sale, they may change their approach to working with you. This could also ruin some of your plans.
Overall, keeping the sale quiet is an excellent way to achieve a better deal without acquiring unexpected problems.
1. Hire a Business Broker
A business broker can help you with a variety of tasks related to a private sale. Besides looking for buyers, drafting documents, and evaluating the business, brokers can help with confidentiality agreements and negotiations.
According to Orlando Business Broker, if you don’t know how to keep the sale private while ensuring that it’s fully legal, you need expert advice. However, you need to keep in mind that a fee charged by a business broker can vary between 3% and 10% of the deal.
2. Create a Confidentiality Agreement
If you are working with a business broker, they can help you create a non-disclosure agreement. If not, you need to draft this agreement on your own. Before potential buyer signs the agreement, don’t provide any data about your business that can reveal details to your competition.
Some NDA samples are available online. However, it’s important to make sure the sample is adjusted to your particular situation. Make sure it includes a clause that ensures confidentiality for both parties. The agreement should have an expiration date.
3. Use a New Email Account and Phone Number
When interacting with the potential buyer, don’t use a business phone number or email address. None of the contact details you use for sales communications should be related to your business. Otherwise, it can be easy to identify your company.
Avoid using your personal contact details since it’s easy to track you back to your company. Ideally, you should create a new phone number and email account specifically for the purpose of the sale.
4. Use Blind Listings
When listing your business, make sure to keep the data you share to a minimum. A blind listing has a headline that promotes the benefits of the business instead of listing the company name.
A business broker can help you design a suitable blind ad that reveals sufficient information to attract a buyer without sharing private details. Once the buyer signs an NDA, you can reveal more information.
5. Involve a Limited Number of People
The fewer people know about the upcoming sale, the less likely the information is going to become public. Involve as few people as you can. In some cases, you need to disclose information to some of your staff.
You may want to outsource some financial and legal tasks to other companies instead of asking your staff for assistance.
When selling a company, the best choice is to keep a sale confidential. Otherwise, you may face problems with your staff, clients, and creditors. To keep the sale private, work with a business broker, use a confidentiality agreement, and keep as quiet about the process as possible.