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Keeping the Sale of a Business Confidential

confidentiality agreement

Why Confidentiality is Important to both Buyers & Sellers

Almost all of the businesses that come on the market are listed blindly and without the name of the business on the ads that buyers see on websites such as or While there may be instances where a business can go public with their interest in selling, it's very rare for smaller companies under $10mm to announce the opportunity is available. 

For business owners (Sellers) maintaining confidentiality can be extremely important in the business sale process. It’s important for reaching your exit goals and for the success of your business post-sale. If word gets out to your creditors, customers, competitors or employees, this could trigger a negative reaction, weakening your business momentum and therefore the value of the business. Moreover, prospective buyers may become hesitant about purchasing your business if they feel sensitive information has been shared with others.

Once you decide to sell your business, confidentiality can be tricky, but less so if you are working with a qualified and experienced business broker. At Playbook Advisory, we understand that keeping the sale of your business confidential is at the top of the list for our clients.

Owners should value what Business Brokers bring to the table, they're experienced at fielding inquiries from prospective buyers and reaching out to prospects without ever mentioning you or your company name. Yet, if you’re selling your business on your own, it's difficult to shield the business from buyers and it's very easy to Google your name to find out what company is on the market.

In this post, we share a few of the steps we can take to ensure the sale of your business doesn’t leak out prematurely and is kept confidential by all parties.

Here are 6 steps you can take to ensure "Confidentiality" when selling your business:

  1. Execute a Non-Disclosure Agreement (NDA):  All buyers must sign an NDA prior to a discussion with our business brokers at Playbook Advisory. The agreement is broad and covers how information can be shared with the buyers advisers, accountants, attorneys and partners. The NDA often will reference the name of the listing found online and/or the listing number from the Broker. It's non-negotiable and must be signed. The Buyer must work through the business broker and not go direct to the client or Seller during the entire process. There are many benefits to both parties to keep the business broker between the Seller & the Buyer.

  2. We advertise with blind ads when advertising the listing via email blasts & online ads: Our Business Brokers do not identify the name of the business, the City or even sometimes the County where the business is located. The online ads are created to draw in prospective buyers not to sell the business. It's a completely different process than selling a property through the multiple listing service.

  3. Our Brokers will Pre-qualify buyers: Screening potential buyers protects your confidentiality as a Seller. Our firm has developed proprietary methods to vet Buyers, we take it seriously and Sellers should seek out a business broker that takes a hard line on weeding out the tire kickers. We like to say we don't like "ghosts", if a Buyer has no LINKEDIN or resume on hand then they're not in our opinion a serious candidate or even qualified to buy our clients businesses.
  4. What Buyers should expect from a Playbook Advisory Business Broker: Qualified buyers prefer information about your business to remain private because they will want to know that the business they are buying has taken steps to protect its trade secrets and financial information.We expect Buyers to be prepared to "peel back the onion" and go through a process that has proven to be successful time and time again. If a Buyer attempts to skip steps we will remove them from the buyer pool with the permission of our client. Multiple conversations are the norm early on and even more so later in the process and buyers should be prepared to work with the business broker.
  5. Review the Clients Offering Memorandum: Now that a buyer is determined to be a qualified buyer they're provided the Offering Memorandum, a written summary of the company listed for sale, it is prepared with the assistance and at the direction of the Seller. The memorandum is not a thorough overview of the business, it's a marketing document used to generate further interest. Yes, key information is left out of the document because over 85-95% of buyers fall away after this document is sent out to prospective buyers.
  6. Buyer-Seller Meetings: The final step in this initial part of the process of selling is for the business broker to schedule the face to face meeting between the Seller and Buyer. Ideally, the meeting is off-site at the office of the broker . Very rarely will this meeting be held or completed by a phone call instead of in person. In our experience, a phone call has much less value and less investment of time for the Buyer. Taking time to meet with the Seller in person is a much better indicator of interest. These meetings should only run 60-75 minutes and cover the operations of the business. Buyers should work to gain an understanding of the Sellers business and to find out how committed the Seller is to train and transition the business. Utilize the business brokers knowledge of the Sellers motivation and interests. 

As you review these steps, remember to understand that most business owners have never gone through this process. They might be nervous, unsure of what's to be demanded by buyers who are all asking for different information at each step of the transaction. A good business broker will assist both parties so that confidentiality is kept during the whole process. At our firm, we have successfully closed numerous transactions over the past 6 years which gives us a considerable knowledge base of how to successfully list, market and sell businesses for sale. We leverage our knowledge of the sales process for the benefit of the Buyers and Sellers. Please contact Jim Peddle at 312-525-9622 or email for more information on this topic or any other merger and acquisition question.

Author: Jim Peddle, Business Broker

Tags: Confidentiality, Playbook Advisory, Selling a Business