Business Brokers Maintain Confidentiality of Business Sale
Confidential business brokers in Palm Beach County provide discrete services for selling, buying, and valuing businesses with no operational disruption to the business. According to recent statistics, there are close to 200,000 licensed real estate professionals in the state of Florida. Only a small handful of these realtors sell businesses full time as professional business brokers. Unlike other realtors, professionally trained business brokers understand the need for confidentiality at all times during the sales process. This includes confidentiality in communicating with the business owner, meeting with the business owner in a confidential way during the evaluation process, and confidentially marketing and listing the business to the public.
Communicate Confidentially with Business Owner
- Whenever a professional business broker in Palm Beach County communicates with an owner of any business, their communication must be kept confidential.
- This begins with the dialogue that takes place even before the business is listed.
- For example, a business broker will never call the business establishment in an attempt to speak with the business owner.
- A business broker would certainly never leave a message with the business owner’s secretary that identifies themselves as a ‘business broker calling to confirm our meeting.’
- Personal cell phones and personal email accounts must always be used.
- This is because of the common desire on the part of business owners to not let any employees, customers, or even their landlord know that they are dealing with a business broker who may sell their business.
- Further, a professional business broker would never go into a business establishment unannounced (with or without any potential buyers), for the simple reason that curious employees or customers may easily decipher the purpose of their presence.
- All buyer-seller meetings or on-site visits must be planned in advance with the seller’s consent and approval.
- Unfortunately, realtors (who do not sell businesses full time) frequently break this cardinal rule.
- They do not understand the need for confidentiality and do not have the experience to know how important it is that all conversations pertaining to the sale must be kept private.
- Remember, residential or commercial realtors are used to placing a ‘For Sale’ sign outside their listings!
Business Evaluation Is Confidential
The business evaluation is the method by which the business broker determines the best asking price for the business. It is also the process by which a professional business broker receives the materials necessary (such as the financials) to justify the evaluation (or asking price) to potential buyers. Everything that the business seller divulges to a business broker during the business evaluation is kept confidential. Only qualified buyers who complete and sign a Non-Disclosure Agreement are ever given the confidential information divulged by the business owner to the business broker during the evaluation. Further, the meeting where the evaluation takes place should be kept totally private from any prying eyes.
Example of Breaching Confidentiality of Business Evaluation
- Jake is a residential realtor that has been called by Craig to sell his restaurant in Palm Beach County.
- When Jake shows up at the appointed hour for the meeting in the restaurant, he proudly presents his business card to the restaurant’s manager and says, “Hi I’m Jake. I’m a realtor and have an appointment with Craig about selling the restaurant.”
- As a result, soon all the restaurant’s employees know about the possible sale of the restaurant, and several employees quit for fear of losing their jobs.
- Craig wonders why Jake would have revealed his identity and purpose to the restaurant manager.
- But Craig made a fundamental mistake in trusting the sale of his restaurant to someone who was not a professional business broker.
- Jake should have ensured that the meeting with Craig occur in private and that Jake’s purpose and identity as a broker be shielded from any employees or customers.
Confidential ‘Business for Sale’ Marketing
A business sale advertisement is far different from an advertisement for a residential or commercial property on the Multiple Listing Service (MLS). Business brokers only use ‘blind ads’ that do not divulge the name or specific location of the business being advertised. A correctly placed ‘blind ad’ does not post pictures of the business, especially if it will allows a viewer to identify the business. Moreover, sending email blasts to potential buyers or other outreach efforts with potential buyers must never divulge the identity of the offered business.
Residential or Commercial Realtors Do Not Market Confidentially
When it comes to selling a business, ‘confidential’ marketing techniques may seem counter-intuitive since the goal is to attract buyers, but are essential in order to maintain the seller’s confidentiality. Residential or commercial realtors generally do not have the experience or training to confidentially market businesses. After all, their purpose in marketing and promoting their property listings is to reach as many possible buyers as possible without the need for confidentiality. In contrast, a business broker never puts a ‘for sale’ sign outside the premises of a business.
Business Brokers Qualify Prospects Prior to Divulging Confidential Information
If a business broker has identified an interested buyer for a business listing, the next step is properly qualifying the potential buyer. This will include the prospect completing and signing a Non-Disclosure Agreement (NDA). The prospect must affirm in the NDA that the seller’s confidentiality and privacy will not be breached in any respect. Further, the qualifying process includes the prospect disclosing the liquid funds they have available to purchase the business, or their ability to qualify for external lending. A professional business broker will never waste a seller’s valuable time and resources with a potential buyer that has not been properly qualified.
Hiring a confidential business broker is the only way to keep the sale confidential throughout the entire selling process. Never trust the sale of your business to anyone other than a professional business broker who understands the need for confidentiality.
Give Martin at Five Star Business Brokers of Palm Beach County a call today for a FREE evaluation of your business.