In its most simple form, the basic principle of marketing is this – tell as many people about your product/service as possible. It’s not rocket science, but you can have the greatest product in the world and never sell a single unit if nobody knows about it.
So it follows that when you are trying to sell something that is probably your most valuable asset, the best way to go about it is to tell everyone so that you increase the chances of getting the right offers from the right people. But, of course, we also have to carefully consider confidentiality! This information in the wrong hands could cause trouble with staff, clients, and competitors – at worst it can have the opposite effect of decreasing the saleability and value of your business.
Two of the most important elements in a successful sale therefore are seemingly diametrically opposed to one another – publicity and confidentiality… how then do you hold the tension between the two?
1. Get advice early
Knowing who to talk to when you are in the early stages is essential. Let’s be honest, making a decision like this is big, and so many of the people you trust are either involved in, or very close to, the business themselves. We are very happy to speak with any business owner, even if you are thinking into the future. We can give you honest, independent and confidential advice on the best way forward. (Contact us)
2. Prepare well
One of the most under-rated pieces of the puzzle is expertly crafted documentation. Well written documentation strikes a balance between attracting interest and maintaining confidentiality. Treading this fine line takes skill, so it’s worth investing in.
3. Research thoroughly
Know as much about who you are going to approach as possible. A lot of nervousness in the sales process surrounds who to approach, so it’s worth bringing some balance to the real risk. The majority of those you approach will gain nothing from spilling the beans, and some may even stand to lose as much as you do. But doing your homework and researching thoroughly will make sure you mitigate as much of the potential risk as possible. Even then there may be a small group of companies, such as your close competitors, who are risky but worth approaching. There is nothing to say you need to approach everyone together, keep these more risky approaches to the 11th hour when they stand to lose more by causing trouble than they do by making a sensible offer.
4. Protect yourself
Make sure you have protection in place before you talk details. A well drafted Non-Disclosure Agreement, or NDA, is a vital document in this process. Opinion is divided on how easy they are to enforce in court, but their real value is as a deterrent. Once you get to detailed discussion stages, your potential acquirer will stand to lose out from a breach of confidentiality too, so they are likely to happily agree to an NDA. They are useful reminders to all sides to insure against lapses in judgement.
5. Plan your communication strategy
Plan carefully who you will tell what and when. It will eventually be necessary to tell people what is happening, family, staff, clients, and the market in general. You need to think about a need-to-know approach, but also take into consideration the risk and impact of them finding out another way. Your adviser can help you to develop a strategy that will keep you in control of who knows what and when.
So it is possible to find a balance between marketing and confidentiality that will give you the best of both worlds. Possible, but not simple, there’s a lot to consider and a lot of work to do in preparation, research and planning.
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