Keeping Confidentiality When Selling A Business In Orlando
Confidentiality is one of the primary concerns business owners have when they are thinking about selling their business in Orlando. They ask themselves how can I sell my business in Orlando when I am involved in the community and so many people know me and my company?
Other concerning questions include:
What if my customers find out?
What if my key employees find out?
What if my competitors find out?
Below are some commonly asked questions that we as business brokers typically hear. Our answers regarding keeping confidentiality should help both business sellers in Orlando keep their potential sales confidential and it will also help buyers rationalize why maintaining confidentiality is necessary and beneficial to both parties.
There are many reasons why business owners want to keep their potential business sale confidential. In fact, it is one of the main functions that business brokers in Central Florida serve. Business brokers help keep the sanctity of the business and the owner intact and it allows the business to be marketed to others without buyers interfering with business’s operation, or distracting the owner.
What advantages does a business seller gain by keeping their potential business sale in Central Florida confidential?
Most business owners want to keep the potential sale of their businesses confidential. The main reason is a business found to be on the open market could be considered more vulnerable to the business environment. Perhaps the customers will feel that a new owner will not offer them the same level of service or price. It’s also possible customers will be amazed at how much the owner is making and think they are being charged too much. This leads us to the reason that business owner might not want their friends, families and competitors knowing how many they make or do not make. At the same time notifying potential competitors that a business is for sale could lead to competitors attempting to poach their customers away. While some of these might sound like they are on the extreme side to outsiders and potential buyers, most business owners feel these are valid concerns.
How do business owners keep business sales confidential?
The best way a business owner can keep a potential sale confidential is to tell as few people as possible. Those buyers that are are told about the potential sale should sign confidential nondisclosures prior to receiving information. Possible exceptions would include their attorney, their accountant and sometimes their landlord. Anyone who would be aiding or assisting in the Sale is often exempt. Hiring a competent business broker in the Orlando area can help serve this function but the business owner has to do their part as well. We recently had an owner tell a manager they “trusted” about the sale. By the next day, every employee knew about the sale. This is why some owners don’t share with even key staff that they want to sell a business in Orlando because sometimes people think a secret is too good to keep!
How do business brokers market my business for sale without divulging the name or identity of the business?
One of the main differences between business brokers and ordinary real estate agents in the state of Florida is the methods each profession uses to market. In Florida, business brokers have to be licensed under the Division of Real Estate. There are times when a real estate agent commercial or residential tries to sell a business and typically they do it the same way they sell a piece of property. They show names, pictures and divulge everything to the public. All of a sudden people from all walks of life start approaching these businesses asking the employees and the owners in front of customers if the business is for sale. These incidents disrupt business operations and cause employees to worry and wonder why they have not been informed about a sale. It also causes major headaches for business owners especially if they have a high-profile business. Most real estate agents do not even know the purpose of confidentiality and normally do not find out until damage has already started. There are many businesses that do not even have common retail or commercial office premises and without those segments the typical real estate agent does not have the ability or knowledge on how to market the remaining attributes of the business.
Business brokers in Orlando on the other hand use an approach where we use brief descriptions, the sales, the earnings and other attributes to market the business while keeping the name and location secret. It is a technique that has to be practiced before it is learned and that is why it helps to work with a seasoned business broker in the Orlando area as opposed to a real estate family friend or novice. Do you really want to entrust a multi-million dollar sale with someone who hasn’t sold a company before or isn’t a seasoned expert in Business Brokerage?
Typically, when a business broker finds a potential buyer, they ask that buyer to fill out a confidential Nondisclosure. That Nondisclosure states that buyers will agree to keep potential sales confidential and they agree to not divulge or use any information discovered in the discussions and information exchange involved in the sale. While a Nondisclosure is only as good as the buyers that sign them, the business brokers at Crowne Atlantic typically make it a point to discuss the businesses and Nondisclosures either in person and over the phone to make sure buyers know the expectations of what they need to do in order to keep the business confidentiality typically discussed at this time. The Nondisclosure also registers the Buyer with the Broker on a specific business enabling the Broker to verify to the Seller that the Buyer was introduced to the opportunity through the Broker.
Can I show this information to my accountant, attorney, partner or father-in-law?
This is actually a very legitimate question with varying answers depending on the type of deal you are working on. Some businesses have to be kept strictly confidential so Nondisclosures must be signed by everyone. However, if it is a typical Main Street business for sale in Orlando most assisting professionals like professionals and accountants are aware of the need for confidentiality and typically have to keep materials in their field confidential to begin with. Business partners, father-in-laws and anyone part of the business buying party should be signing a Nondisclosure.
If you have additional questions on keeping your business confidential or if you’re just thinking, how can I sell my business in Orlando or the surrounding …….area contact us. We can often times offer information on what potential business buyers look for and estimate what value buyers might place on a business. The business brokers at Crowne Atlantic can be reached at 407-478-4101 or check out our website at www.crowneatlantic.com.