Question: How do you keep the sale process confidential?
Short Answer: “Don’t tell anyone.”
Longer Answer:
Every seller should be paranoid about keeping a potential sale confidential. Your employees, customers, competitors, and vendors should only learn about the sale AFTER the closing and in a manner that you, the seller, are in complete control. Majority of deals close without leaks, but when a leak does occur, it can be quickly traced back to the seller himself.
During every transaction at some point, an employee, customer, or outside third party will ask the owner the point-blank question, “Are you selling your company?” As the owner, you must be ready for this question and how you are planning on responding. If you don’t know how to respond, you can mention that “everything is for sale, if someone offers me $100 million in cash for my company, then I will gladly sell, but that offer has not yet been made.” At MB Law, we will mark envelopes with “PERSONAL AND CONFIDENTIAL,” while other owner’s preference is to have bills for services be sent to their homes.
Before closing at some point, you may have to tell a key employee (or several) that you are selling your company but limit this disclosure to as few employees and people as possible. Buyers and their respective advisors at some point will insist on inspecting your facility. Plan ahead when allowing potential buyers to inspect your facility. Have the potential buyers and their teams dress down and not so formal when visiting during normal working hours. You can also have the potential buyers arrive after hours so there won’t be any employees around. If that is not possible, then introduce the potential buyers to your employees as bankers, auditors, prospective customers, or friends who would like to see how the company operates.
Again just don’t tell anyone, keep them on a need to know basis.
If you have any questions or would like the complete answer, please reach out to MB Law at info@mb-law.law to request your complimentary copy of "Deciding To Sell Your Business, The Key To Wealth And Freedom," that has over 50 questions & detailed answers.
* This information is for general purposes only and is not intended to constitute any specific legal advice of any type.