Leaks – How Do They Impact Your Business

One of the most important things is safeguarding your business from leaks. Leaks can spell disaster for your business. If you are looking to or are in the process of selling your business, leaks can be particularly damaging. There can be a range of consequences if there is a leak that you are planning on selling your business. Everyone from employees to customers, suppliers and, of course, prospective buyers and competitors could all take notice and this could have ramifications.

Confidentiality can be a bit of a Catch-22 situation. Sellers need to let prospective buyers know that the business is for sale so they can get the best price possible for their business. The greater the number of potential buyers contacted, the greater the chances of receiving top dollar. However, the more potential buyers that know you are selling, the greater the risk of a leak. This situation represents a considerable dilemma.

As a buyer, you may discover that owners can be overly concerned about leaks. It is important to remember that most owners have a lot riding on their business. The business may represent their largest asset and often their greatest professional accomplishment in life. Sellers need to know that the less time a business is on the market, the lower the risk of a leak. Also, the longer the negotiations go on, the greater the risk of a leak.

Sellers should remember to keep important documents related to the sale literally under lock and key. Everything should be considered confidential and transferred to buyers in a highly secure method. Confidential information should not be emailed or faxed. Confidentiality should be stressed at all times. Sellers and buyers alike should remember that they shouldn’t discuss the sale or potential sale with anyone.

One way to dramatically reduce the risk of a leak occurring is to work with a business broker. For business brokers, confidentiality is a cornerstone of their operation. They require buyers to sign very strict non-disclosure agreements.


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