When it’s time to sell a business, you will want to keep confidentiality first and foremost in your mind. The reality is that many deals do not succeed when confidentiality is breached and others learn that your business is for sale.
What Can Occur When Confidentiality is Compromised?
If suppliers or creditors learn that your company is for sale, they may want to change terms established previously which can negatively affect cash flow.
Additionally, if employees and customers discover your business is for sale, they often fear the consequences of operating under a new owner. This could prompt employees to look for new jobs and customers to stop patronising your business.
If competitors become aware of the sale of your business, they could leverage this through applying more aggressive strategies to take your share of the market.
Confidentiality breaches are detrimental however, they can be avoided. Your business broker or M&A advisor will be sure to vet all prospective buyers and use reliable confidentiality agreements to protect your best interests.