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Last Updated on: July 25, 2020 by Joseph Muriithi
Displaying professionalism in all aspects of a business is a fundamental requirement that is reflected in a business performance. Selling a business will require professionalism and confidentiality at its best. When selecting your business intermediary or business broker it is critical that they have the capacity to portray confidentiality by understanding its pivotal role in the success of a deal. It is very unfortunate that a seller would have to bear with a deal gone sour because their business intermediary breached confidentiality, a situation that has happened to sellers on countless occasions.
Confidentiality is maintained by agreements between a number of parties depending on the nature of the relationship. These parties might be suppliers, vendors, creditors, and advisory personnel. A failure to maintain confidentiality with these parties may lead to negative reactions that stall and even derail selling a business transaction. All issues arising from confidentiality have a way to negatively impact your business. For instance, creditors might stop cash financing, vendors could change their terms, and so on.
Negative reactions from employees and customers might be observed when a breach of confidentiality happens. Employees might start worrying about the security of their jobs once word spreads that management is under fire from some other party. This process can prompt employees to go looking for jobs elsewhere leaving you with positions that need to be filled, and woe unto you, they just might be your best employees, the kind that keeps your business afloat. This could lead to loss of customers and significantly raise a red flag to your buyers.
And then there is your competition as if it is not bad already. When word reaches your competition that you just might be selling your business, through breached confidentiality, of course, they make their move. They will take advantage of the situation and try and capture the attention of your customers in an effort to woo them, and they are not inclined to show you mercy. Finally, a breach in confidentiality can just spell out the mediocracy in the transaction and prospective buyers might end up running for the hills at some point. The following is a guide to the best way to protect your confidentiality.
Use of a broker
Opting for a great business intermediary or business broker is the best way to protect your confidentiality. Business brokers have expertise in this filed and have mastered the art of promoting a business transaction without raising alarms to your competition, employees, vendors, and creditors.
There are very many that could cause a breach in your confidentiality, some of them triggered by you. When attempting a sale on your own, you might end up revealing who you are. At the end of the day, communication mechanisms will come into play, emails, phone numbers, physical addresses and other critical information that can be traced back to you easily and eventually your business. Look for a broker, don’t get involved.
All the best ways to protecting yourself from a confidentiality breach lead to a business broker. A business broker will help you bypass potentially incriminating issues on your side. They will also ensure all interested parties sign confidentiality agreements and are pre-qualified. This way, only the absolute necessities are revealed. In simple terms, it is best to work with a professional and well-seasoned business broker and maintain your confidentiality at all cost.
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