The Critical Importance of Confidentiality in Selling Your Business

Maintaining confidentiality is of utmost importance when selling a business. However, maintaining confidentiality can be difficult and is one of the key reasons any seller should seriously consider working with a business broker or M&A advisor.

A breach in confidentiality can quickly kill a deal for many reasons. Such a breach can cause suppliers, key customers or clients, as well as employees and management, to become concerned or alarmed. These concerns arise as a change in ownership of a business can translate into major operational changes. Vendors and suppliers worry about disruptions, and employees and management may become concerned with their job security. As a result, key team members may begin seeking new positions elsewhere, making the prospective buyer hesitant.

Additionally, a breach of confidentiality reaching competitors could entice them to poach your customers or clients. As a result, your business could experience a sharp decrease in revenue as competitors grasb market share at your expense, making the business less attractive to potential buyers.

Even if all employees and management stay and all vendors, suppliers and key customers move forward with business as usual, buyers may still walk away. Prospective buyers may do so due to the worry of potential negative outcomes due to the breach in the future.

It is both challenging and imperatively important to maintain confidentiality. Brokerage professionals are experts in maintaining confidentiality. Any owner looking to sell their business will be well-served by taking advantage of all that a business broker has to offer.