The Pros and Cons of Selling Your Business Confidentially

A confidential sale keeps the identity of your business as private as possible. When a seller takes this approach, online listings are usually kept brief and buyers are often required to sign a non-disclosure (or NDA) before they receive the full sales details. There are pros and cons to a confidential sale, and whether it is the right approach to your business sale really depends on several factors.

Pros to selling your business confidentially:

A business owner will sometimes have concerns about advertising the full details of their business online. They worry about their customers or employees finding out, as this can sometimes have repercussions on the productivity of the business. Employees might become anxious about the future of their role, the future of the company and the change of ownership. Equally, if clients were to find out about the sale, it could jeopardise the trust they have moving forward with the business. 

A confidential sale reduces the possibility of unwanted parties finding out that your business is on the market. Giving you more control over who receives your business’s details, you will have the ability to filter out individuals you’d prefer didn’t know your business was for sale.

An NDA also offers protection from gossip. Once signed, if the potential buyer were to reveal this information to the general public, you would have the legal right to sue them. This prevents any unwanted concern from employees or customers – and also keeps the matter away from the prying eyes of competitors.

Cons of selling a business confidentially

Unfortunately, as a general rule, a business that is being sold confidentially does not attract as much interest as one that is not. When browsing online, potential buyers will have much less readily available information – meaning they may disregard your business for others which they can already identify match their criteria. A confidential sale places a lot more steps between your potential purchaser enquiring and them receiving your full sales details. This delay could drag the process out longer – or even cause interested parties to walk away.

Furthermore, the enquiries you do generate may be from less qualified buyers. Because the information available to them would be fairly vague, you may find you have parties enquiring for more information – only to realise upon further inspection that your business isn’t going to be suitable. As a standard sale provides more information up front, parties that enquire already have a strong inclination that the business matches what they’re looking for – making them a better qualified lead. Therefore, making the decision to sell confidentially could mean you end up having to deal with a lot more dead-end enquiries.

In conclusion, whether a confidential sale is the best thing for your business depends on your circumstances. While one owner can benefit from keeping things quiet, another owner may be looking to sell their business quickly and effortlessly. If you’d like some advice about what type of sale may work best for your business, it may be worth contacting an expert broker.

Intelligent Business Transfer have been helping people to sell their business for over a decade. They offer a free of charge business consultation, where you would discuss how much your business is worth, who might be interested in purchasing and if a confidential sale might be beneficial. Click here to arrange a call back or give them a ring on 0800 612 7718.

The Pros and Cons of Selling Your Business Confidentially