The latest in our series of articles crystallising the complex transaction of selling your business into ten golden rules. You will only sell your business once and have one chance to get it right!
KEEP IT QUIET
Apart from getting the best possible deal, any sale process should also minimise disruption through the process and reduce the risk of damage to the business in the event of an aborted transaction
It can be hugely disruptive and damaging if your customers, people, suppliers and competitors find out that your business is for sale, so the basic rule is to only tell those people who absolutely need to know and swear them to secrecy
Many owners are very uncomfortable with not informing key and long-standing team members of their plans, feeling that it is simply “not right” to withhold what is going on to people that have been with the business for a long time and have contributed to its success. This is totally understandable but as well as potentially causing many problems for the owner, telling employees can often result in them assuming the worst and that their position has become seriously under threat. Careful consideration needs to be given to introducing that level of uncertainty and distraction into their lives for potentially little gain in the early stages of a potential transaction
In theory, it is best to keep an impending sale quiet until very close to or at completion. Being practical, it is often “when, not if” the pressure to disclose to certain employees becomes too great – often as a result of unusual activity around the business, requests for information, the owner not being available as much as usual, market rumours, etc. In these cases, it is reluctantly accepted that more people may need to be taken into confidence as the transaction progresses. Whilst no two situations are the same, practical and experienced advisers will be able to help you manage the position