Confidentiality is critical when selling a business – but how do you keep your staff, customers and competitors from finding out?
It’s a nightmare scenario for many business owners. Your closest competitor looks you dead in the eye and says: “So, I hear your business is up for sale?”
If the ‘wrong’ people know that you are looking to sell, at the wrong time, a great deal of confidence and goodwill can be eroded. No wonder many business owners are deeply concerned about approaching potential buyers.
One former BCMS client articulates how many business owners feel: “People are our most valuable asset and I didn’t want the staff becoming uneasy. It was the same thing with customers. I didn’t want that rumour mill working, and we contained that totally. Everyone has seen the outcome as a positive. No customer ever approached me, no employee ever approached me – well, how much more confidential could it be?”
Managing confidentiality when selling a business
So how does BCMS manage confidentiality? The answer is a combination of strict, tried-and-tested techniques, and an agreed communication strategy, tailored with each client, for complete peace of mind. From the outset we advise the use of ‘safe’ non-work email addresses and personal phone numbers to contact you. We conduct preliminary meetings either at our premises or at a venue convenient to you. If we come to a client’s premises, we may agree in advance how we describe ourselves to any front desk staff we meet.
Confidentiality is about control. Everything we do on our clients’ behalf is approved and signed off by the client – from our agreed research list of potential acquirers, to the documentation and business plans we produce. Our clients know exactly who we are contacting and when, and have full veto of any company names on the list. We can even stagger our approach, and contact companies our clients are concerned about (key regional competitors, for example) much later in the process. When it comes to sharing information, we use a secure data room so clients can upload documents in their own time, and away from the office.
The first approach to potential acquirers is made by phone call, supported by an anonymous ‘teaser’ letter. Neither the caller nor the letter names your company, or any details that are likely to identify your company. We even ‘Google proof’ the language used on the letter to ensure the combination of words does not bring up your business on a search engine query! (Because that, of course, is the very first thing any buyer will do!)
Proven checks and safeguards
BCMS’ unique proprietary database means we have contact details of the right decision makers at organisations all over the world. We never send information to a generic email inbox. We only approach named individuals at potential acquirer organisations – often board-level individuals such as the MD or, for larger trade acquirers, the M&A director. Only when these senior professionals have signed a legally binding Non Disclosure Agreement (NDA) do we release the full Information Memorandum, which names you and emphasises the benefits of acquisition or investment. And even then, we check with you again to ensure you are happy to release the document.
Many clients ask us how we can guarantee that these individuals will respect the NDA. The answer is that acquirers prize confidentiality just as much as you do, for much the same reasons – why would senior executives want their staff and competitors to know they were looking to buy? It could reveal their confidential business strategy, and remove their competitive advantage at a stroke.
The value of a team around you
All BCMS clients benefit from a dedicated team of professionals, each with his or her specific role. It’s this resource that allows our clients to focus on what they’re good at – running their business. As another client told us: “We were impressed at BCMS’ depth of knowledge, the depth of the team and how people were brought in at the appropriate time; also the hand holding, if it was necessary, and the reassurance.”
Even disbelieving clients are converted when they see how hard BCMS works to protect confidentiality.
“Initially I was extremely doubtful that BCMS would able to keep the sale of my business confidential,” one client told us a few years back. “The way BCMS handled it, we didn’t have any problems, which I have to say I was extremely surprised about.” This particular business owner has since sold another business through BCMS, and has referred a number of new clients to us. But we can’t tell you about them, of course – it’s confidential…