10 Dec The Importance of Confidentiality in Business Sales
The immediacy of the internet and e-mail can create problems for inexperienced business brokers. Prospective business owners see an ad for a “manufacturing business, profits $350,000 P.A” and email off an enquiry. Many expect an immediate response identifying the business and providing full financial and operational details.
This is often totally against the owners’ interests. The owner may be most concerned that their customers, suppliers and staff are not aware that a sale is contemplated until much later in the process. The owner also needs to be assured that any prospective buyer has the background experience, skills, and financial resources to successfully buy and run the company.
Safeguarding confidentiality is a major issue for business brokers. They need to secure a written confidentiality undertaking from the buyer, check their background, and ascertain their financial capacity before revealing commercially sensitive information. Those who have owned businesses previously will understand the importance of this. First-timers struggle to understand … they have enquired about houses for sale and been overwhelmed with inside and out photos and the address.
Business brokers who follow the process discreetly protect and benefit both sellers and buyers.