Be sure to read part 1 if you haven't already
3. Keep it Confidential
You've made the decision to sell. Now what should you do?
It is imperative that you understand why confidentiality is important to the successful sale of a business and what can happen if a sale is prematurely announced.
Confidentiality throughout the sales process is important for many reasons, some include: staff might start considering the stability of their employment and look elsewhere, customers may lose confidence in the business, competitors might capitalize on the news and do something detrimental to your business or creditors may push for earlier payment due to the unknown future.
A Business Broker will adhere to a strict process to ensure a sale is kept silent. Some tactics include:
- Qualifying Buyers :
Screening potential buyers by gauging their seriousness and looking for financial and managerial capabilities. Screening restricts the information from getting into the wrong hands.
- Appropriate marketing strategies
How do you advertise a business for sale without spreading the news too far? Business Brokers know just what to do, they create "blind ads" that contain non-specific descriptions of a business, but are phrased in such a way to attract interest in a business.
- Paperwork designed to promote confidentiality
After the screening process, a Business Broker also requires all potential buyers to sign a strictly worded confidentiality agreement before the release of any further details about the business.
- Manage appropriate release of information
Until an actual offer to purchase/letter of intent has been signed, a Broker can phase the release of information about the business to match the growing evidence of buyer commitment.
4. Expertise in Attracting & Securing Serious Potential Buyers
A Broker is in continuous contact with all categories of buyers using efficient and effective search procedures to find and screen those that are best qualified to buy a business. As mentioned before, buyers don't advertise, you must find them. By the very nature of the business, a Business Broker comes into contact with a multitude of prospective buyers because they are attracted to business for sale listings.
A database of buyers is a powerful tool owned by a Broker as it allows them to mix and match prospective buyers and listings. They can match up the right buyer to the right business by focusing on prospects that are financially qualified and genuinely serious about business ownership.
A well-networked Broker will have important industry contacts that connects them to large buyer groups such as Immigrants and First Nations. Contact with these groups is integral to achieving maximum fair value for your business as the ultimate goal of a Broker is to receive multiple offers on a business in an effort to drive the price up for a seller.