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Confidentiality in the Selling Process
Make certain that all employees, customers, vendors and other people you regularly deal with are unaware of your decision to sell the business. Remind all parties that are on a need-to-know basis of their fiduciary responsibilities and the harm that may be done to you and the business if your decision is discovered.

This includes:
  • Bankers
  • Accountants
  • Attorneys
  • Shareholders
  • Family
  • Board of Directors
  • Sales Representatives

I am reminded of a client that suffered when a family member, serving on the Board of Directors, mentioned to an outside party that the decision was made to sell the company. This news reached the ear of a local customer and all too quickly customers across the country learning of the decision panicked. Undue customer’s concern caused a major loss of sales revenue which decreased the company’s value. Readers are reminded to be cautious in discussing business plans with insiders and business associates.
Another incident involved a seller releasing information in unedited form in response to a buyers request for a list of customers and related sales. This type of request is not unusual.

Although expedient to print out a list of sales by customers, sellers are advised never to do so before having a Letter of Intent in place with the appropriate non-disclosures or Confidentiality Agreement in place. Edit the list. Use numbers for customer’s name and location. 


This technique applies to employee and vendor lists. Substitute names with numbers or other codes. Prudence demands protection of proprietary information.
Real Estate Brokers frequently tell the world that a given property is for sale. Signs are placed and existing real estate or business opportunities are noted in the MLS. They tend to rely on their network of brokers to generate market interest. Although this system works for real estate it is not recommended for mergers or acquisitions.

M&A professionals act in a very discreet manner maintaining confidentiality throughout the selling process. We appreciate the sensitivity of proprietary information and the value of non-disclosure agreements. PGSA maintains relationships with many hundreds of qualified people and companies that have an interest in acquiring companies that fit their criteria. If you want to learn more, contact us via email or give our PGSA professionals a call at (805)218-7859.text here.