How Business Brokers Protect Your Confidential Information
When it comes time to sell your business, you want qualified buyers to know — but you don’t want to announce the sale for the entire world to hear. Fortunately, business brokers are skilled in the art of shielding confidential information while still effectively marketing your company.
Here’s a look at some of the most important ways your business broker can protect your confidential information.
Using Blind Listings
If customers, employees, or suppliers learn that your company is for sale, your business could be disrupted. Customers may turn to competitors, employees may panic and look for employment elsewhere, and suppliers may start to worry about losing their business relationship with you.
All of these scenarios can cause a business’s value to drop, and that’s the last thing you need when your business is for sale. That’s why business brokers use “blind” listings. These listings include key financial information and a general description of the company, but they don’t list it by name.
Vetting Buyers Thoroughly
Your business broker won’t give information about your company to just anyone. Before setting up a meeting or revealing additional details about your business, your broker will look closely at a potential buyer.
Specifically, they’ll verify that the buyer has the financial means to make the purchase and that they’re serious about buying the company. Many brokers maintain existing networks of qualified buyers. This way, they may be able to find a purchaser without having to market your company extensively.
Signing Non-Disclosure Agreements (NDAs)
Once a buyer has been vetted, they don’t immediately receive all of the relevant information about your business. Before revealing sensitive information, your broker will typically ask the buyer to sign an NDA.
This contract prohibits the buyer from sharing any confidential information they’ve learned. NDAs are legally enforceable, so you’ll have recourse if a potential buyer breaks confidentiality.
For example, if a potential buyer shares your company’s identity on social media and you lose money as a result, you may be able to sue for damages.
Serving as an Intermediary
Generally, all communications between you and a potential buyer go through your broker. This saves you from the headache of constant communication with would-be buyers. More importantly, it stops buyers from prematurely identifying your business and possibly contacting employees or suppliers.
Emphasizing Data Security
If unauthorized third parties gain access to your business broker’s files, they may discover sensitive information about your company. To reduce the risk of a data breach, business brokers typically rely on cybersecurity measures like these:
Data encryption
Secure networks
Secure file-sharing tools and other communication channels
Virtual data rooms (VDRs)
Because maintaining data security is a continuous process, most business brokers regularly update their systems to address potential vulnerabilities.
Your Information Is Safe With Your Broker
When you sell your business, you and your broker are on the same team. Business brokers understand how devastating leaks can be to a sale and to your company as a whole, and they have the necessary tools to protect your confidential information.
Selling your company can be stressful, especially when the current operations of your business are on the line. But when you work with a broker, you can ensure your information is in good hands.