BayState Business Brokers Blog

Confidentiality - Priority Number One

For almost all of our sellers, their biggest concern is maintaining confidentiality. If it became known that their business was for sale, a number of serious consequences could occur. A key employee might look for another job out of concern that they might lose their job under a new owner. Customers might go elsewhere fearing that a new owner may not give them as good service or prices. It could affect other relationships - such as with a banker, supplier, or landlord. Concern about confidentiality is a big reason that many owners, who would like to sell their businesses, don't put them on the market.

Can an intermediary guarantee a seller that there will never be a breach of confidentiality? No, no one can. By exposing a business to more buyers, it increases the chance of more offers and a faster sale at a higher price. But, exposing a business to more buyers also increases the risk that there will be a breach of confidentiality.

For us, maintaining confidentiality is our top priority and we have established procedures to maintain confidentiality. In today's marketplace, you have to market a business on the Internet to reach the most buyers. In addition, we reach out to businesses, private equity groups, and individuals who may be potential buyers. In both of these situations, we have to do so without identifying the company. We use a Blind Profile to market a business. This is called "blind" because it does not identify the business. When we write these, we leave out any information that would identify the business. Then, before we show the Blind Profile to anyone, our sellers review it to be sure it does not identify their business to potential buyers.

After a buyer contacts us, we screen them and have them sign confidentiality agreements before the business is identified to them. Our primary screen is to determine that they have the financial capacity and business experience to buy the business. We also use our judgment, and consult with our clients, to determine if they are someone we do not want to identify the business to or deal with. Only after they are screened and sign a confidentiality agreement is the potential buyer given the identity of the business. Our systems work. If you spoke to our previous clients, you would learn that we do an excellent job of maintaining confidentiality.