A great deal can fall through if you fail to use a confidentiality agreement properly. There are so many details involved in putting together a business sale and keeping the transaction on a need to know basis until you’re ready to reveal your intentions is key to your survival.
The last thing you need is your vendors, clients, employees, and suppliers finding out that you’re selling before you tell them. This article explores all of the ways an ironclad confidentiality agreement can protect your transaction.
It Protects You From Losing Clients
Depending on what kind of business you run, you may make your revenue using a series of client relationships. When your clients find out that there will be someone else handling their business, they may not want to make the transition.
If all of your clients jump ship before your business sale goes through, then you have nothing left to offer the buyer. Protect your client relationships by insisting on a strong confidentiality agreement before showing any prospects information about your business.
It Prevents People From Stealing Your Intellectual Property
If you run a business that has intellectual property and copywrited processes, then it’s important for you to limit how much information prospective buyers are given. You don’t want a competitor to walk out of the door with your IP.
If you have protected information that needs to be shared with prospects in order for them to realize the value of your company, then include the relevant facts. But, otherwise, keep your private processes under your hat until the deal is further along.
It Prevents Others From Poaching Your Employees
Competitors don’t just try to steal IP, they also want to poach the employees that helped you develop your processes.
Protect yourself from losing valuable employees by making them off-limits using your confidentiality agreement.
It Prevents Employee Turmoil
If your employees find out too soon that you are selling your business, they may become nervous about the transition and try to find a job somewhere else. To prevent your employees from becoming frustrated and fleeing, you should have a plan in mind for when you reveal that the company will be for sale.
Try to get everyone on the same page. But until then, make sure you keep everything under wraps using an ironclad confidentiality agreement.
It Preserves Your Vendor Relationships
Your employees and clients aren’t the only parties that you have to worry about keeping when you’re selling your business. You also have to think about maintaining quality relationships with your suppliers and vendors.
To ensure they find out the news when you want them to, include speaking to your vendors as part of your confidentiality agreement.
It Keeps Your Transaction Discreet
Confidentiality agreements don’t just protect the business of the seller, they also keep the sale discreet allowing the buyer to make people aware of the transition when they think it’s best.
A confidentiality agreement should always be presented as a way to protect both parties on either side of a transaction.
How to Ensure You Have an Ironclad Confidentiality Agreement
Writing a confidentiality agreement yourself and listing your business buy owner is one way to get it on the market. But if you want to keep the sale under wraps, you’re going to need a professional’s help.
A business broker can help get the word out about your business coming on the market without sharing the wrong details. They know how to shape confidentiality agreements and have databases of potential buyers that they can approach with the utmost discretion.
Don’t take the risk of losing your business’s value with a broached confidentiality agreement. Contact me today for assistance.