Confidentiality: We recommend that you do not float the idea of selling the business past employees, suppliers, customers, competitors or others in the industry, in any form whatsoever, and that you do not begin discussions with any prospective buyer until pricing, terms and your selling strategy are fully formulated and prepared, documented and ready for release. Bad things can and often do happen when the wrong people know, or think they know, the company is for sale.

Maintaining Confidentiality is an matter over which we find views crossing the spectrum. Some will have little or no concern about keeping it quiet and confidential. In fact, some would and do post a picture of the business and name the business in their opening presentation, while others will be paranoid about releasing any real information.  In fact, some would and do ask the buyer to make an offer, before releasing any quantifying information of the business.

In our view, these are generally unwise on one hand and unrealistic on the other.

On one hand, releasing confidential information to the wrong person, or even disclosing your intentions prematurely can threaten ongoing profitability and the value of the business. On the other hand, if you’re looking for a serious offer from a serious buyer, and if want an offer for a full fair market value, you’ll first have to allow the buyer to look under the hood and kick the tires.

But to begin with, Keep it all Quiet and Confidential … As you begin to think about selling the business, may we suggest that you think about it and prepare for it quietly; that you do not float trial balloons by people you think might be interested or put out feelers in and around the industry. In particular, we recommend that you do not discuss the idea with employees or with suppliers, or customers, or competitors, or with anyone else who might be in position either to benefit from, or feel threatened by your plans to sell.

Even if someone is thought to be, or even known to be a good prospective buyer, we recommend that you do not discuss the prospects until after you’ve developed your selling price and terms, and until your disclosures are fully prepared and ready for release, …until you know the deal you are prepared to close the sale on and until you are prepared and fully ready to explain and justify your business and your complete selling proposal.

Confidential information should never be released wistfully or indiscriminately. There is no way to “unring” the bell that’s been rung, and bad things can and often do happen when the wrong people come to know, or think they know, a company is for sale.

Necessary Disclosure … At the same time however, in order to gain the serious interest of a serious buyer, and in order to ascertain the level of that interest, an equally serious seller must be prepared to disclose a great deal of very confidential information. An experienced buyer is not going to provide a serious or committed offer to purchase the business for it full fair market value until the buyer has been privy to a great deal of confidential information on which to ascertain that full fair market value.

Not all buyers will expect access to everything immediately, but all experienced buyers will want access to everything before they’ll be ready to make a firm commitment.  At the same time, a cautious seller is going to be (and should be) reluctant to disclose all that information until sure of the serious interest of a buyer has the intent and ability to buy and not just to look and learn, and those concerns should elevate when the ‘looker and learner’ might be someone from within the sellers industry; and maybe even a competitor.

What and When to Disclose … We suggest that you do not identify the owner/seller by name or description and suggest also that you do not disclose the identity of the business by name of description either, in fact, we suggest that you take precautions not to do either inadvertently, until you are satisfied of the buyer’s serious and legitimate buying interest, and until you are satisfied the buyer has the the ability to buy and is ready, willing and able to do so when equally satisfied with the business, and until you are reasonably satisfied you have the business that will be satisfactory to the buyer, and until you both agree to be introduced to the other.

In our experience, we have found by withholding the identities of both owner and business, that a great deal of material and quantifying information about the business, such as sales and earnings history in real detail, what the company owns and what the company owes, a detailed balance sheet value to be included in the sale, price and terms and justification of both, the business history and the company’s story, reason(s) for the sale, and transitional cooperation and expectations, … and that such can be largely presented safely and confidentially right in the Ad you post on  If you have not done so, may we suggest that you take a look at Sample Ad  Valu4Sale – S00179

This is the information most buyers will want to learn as quickly as possible, and this is the information on which a buyer can quantify a serious level of interest, quickly. If the buyer’s interest is strong, then presumably, such interest will entice the buyer to respond to you with the satisfactory information you will require to take a next step.  If not, then perhaps you have your answer with respect to this buyer, and you’ll not disclose anything further.

Conflict of Interest between Buyer and Seller … The conflicting interests of the buyer and seller can surface early when a seller presents an Ad with very little quantifying information, but maybe not avoiding identification. When a buyer responds with an interest and asks for meaningful financial information, there is often a pause by the seller. The seller now knows nothing about the buyer and the buyer knows little about the seller, except who the seller and/or business is. This can then set up the conflict of “who’s first” a conflict that generally does not arise when material information is given from the outset, but no identification.

Beyond the Information in the Ad … We recommend that your selling proposal be carefully calculated, developed and prepared in written detail, and thereafter, that information be released out of that preparation under strict terms of confidentiality and only to those who have been pre-qualified as having a sincere and capable buying interest. Many, including your competitors perhaps, will be interested in looking and learning about your business. Some may be interested in buying if its a steal. Fewer will be seriously interested in purchasing the company for its full and fair market value, but such is the interest that should be selectively identified before identified disclosures are made, and identified disclosures should be limited to just those few.

For many, probably nothing more need be said, but as mentioned earlier, confidentiality is an issue over which we find views crossing the spectrum, and you may not yet be convinced …

When contemplating the idea of selling your business or as you become engaged in the selling process, we think you should always assume the following (and more) problems can and will develop from indiscriminate and untimely disclosure of your intent to sell and decide to release confidential information associated with you and your business and your intention to sell.

  • Many employees think of their relationship with their employer as a type of marriage. When you tell them you’re ‘thinking about selling’ they may hear the equivalent of you’re ‘thinking about divorcing them’ and often, even in good employer-employee relationships with years-long bond of trust can be broken.
  • Your staff will generally represent a significant portion of your company’s value. Employees can become nervous and some may actually leave for what they think will be more stable employment. An experienced buyer can often sense an unsettled staff and become nervous and either withdraw or perceive reduced value.
  • Even if selling is a futuristic objective, competent and stable staff will be key to building and maintaining your company’s value. Unstable, nervous employees can become unmotivated and uncommitted. Telling some employees you are even thinking about selling can play on their minds and adversely affect their focus, loyalty and work ethic. Such attitudes can cause quantity, quality and other issues that will adversely impact the ongoing profitability of the business, which in turn, will adversely impact the value of the company when selling time arrives.
  • You should assume that your competitors will take advantage of any opportunity, including of any knowledge (indeed, any rumor) that the company is for sale. Assume that they will ensure that your customers hear the news as well, and assume that some of these customers are apt to lose confidence and decide to trade elsewhere. Any business decline, between now and the sale date will result not only in diminished profits, but may result also, at best, in a diminished offer from the buyer.
  • Suppliers extending credit to your company may do so because of your good payment habits and dependability over the years. Some suppliers, learning that you are soon going to be gone from the business, may begin to pull back, not wanting to become exposed to new and yet unknown ownership.
  • Bankers are nervous of small business at the best of times. They know you, but they don’t know the yet unnamed buyer. In fact, a banker might become concerned that your focus could begin to fade, as you pursue a selling objective. A nervous banker could have an adverse affect on your business, and again, a declining business is going to be less attractive and less valuable to a buyer.

These are but a few minefields one might encounter if and when word gets out prematurely. There are surely others, and we believe it best to bide your time with any announcement of your intent to sell.

Disclosure to all the above will become necessary eventually. Disclosure, released carefully in a timely manner that does not erode confidence will be beneficial to buyer and seller alike, and in our view, such disclosure should be withheld initially until it can be disclosed safely at the appropriate time. A buyer with a name, a face and a personality, introduced in the right way, at the right time, will be much more tenable than will a totally ‘unidentified and faceless someone’ who might be buying the business. We have found it advantageous to withhold any disclosure until the actual buyer can be associated with the announcement, and introduced.

This should generally mean waiting until after an Offer to Purchase has been submitted by the buyer and accepted by the seller, and usually, until after at least most due diligence has been conducted and accepted and the sale is about ready to close. Final diligence is often related to will key employees continue after the sale, and will customers remain loyal to the company.

As stated earlier, conflicting interests of buyer and seller can surface early, particularly when the planning, preparation and justification have not been adequate. But, as said earlier also, these conflicts can be, and are routinely mitigated by pre-diligence work and preparations completed in advance of, and in anticipation of the questions.

Back to the Listing Site

Let's get started creating your first Buisness-Trader Ad or find your perfect business!