Selling a business is a journey that begins in one of two ways. It can be buyer-initiated, where opportunity knocks and someone approaches you and asks if you want to sell a business. Alternatively, as a business owner one day you may feel it’s the right time to exit and choose to put your business on the market so you can move on to something new, or retire and realise your other aspirations.

Corporate finance experts find that one of the first questions business owners ask is, “How can I protect confidentiality when I sell a business?” Confidentiality breaches are often more of a perceived risk than they are in reality – and unlikely to be an issue when your business sale is handled by experienced professionals. That said, when you consider the implications of your staff, major customers or competitors finding out that your business is on the market, you’ll want to know how to mitigate the risk.

So, let’s consider the above scenarios and explore the precautions you need to take to protect your confidentiality when you sell a business.

Say nothing until you get an NDA

Serial acquirers are becoming more and more proactive; engaging advisers and using their teams to seek out acquisition opportunities by contacting business owners directly to gauge their interest in selling. When you’ve worked so hard to build a business, a surprise approach from an acquirer can feel like the ultimate validation of your success – but don’t let flattery blind you.

A common pitfall in this type of situation is revealing too much information without a non-disclosure agreement (NDA) in place. Even if it just feels like a casual introductory chat over the phone, you could end up revealing more about your business and future plans than is advantageous. Say nothing – and don’t release any sensitive information that isn’t publicly available – until you have your own NDA in place (never use theirs).

The main purpose of the NDA is that it’s there to protect you, but it does have an added benefit. Once signed, it will allow you to provide further information which is now bound by the agreement, creating greater interest in your business. But remember, just because you have the NDA, don’t show all your cards at once. Keep sensitive information under wraps until later in the process.

Work with a skilled adviser

The most effective way to exit your business is to engage an experienced adviser who will proactively identify, target and approach several potential buyers whilst at the same time protecting your confidentiality.

They can also help business owners create an anonymous introductory letter to present the opportunity prior to any interested party signing an NDA. The goal is to encourage a prospective buyer to sign the non-disclosure agreement, so you can release further information that will increase interest and lead on to meetings. The letter needs to be engaging and generate interest – but it must not give away who you are.

If you work with an adviser when you sell a business, it also means they can set up a private email address for all communication to go through and you can have meetings at their office. If you do have meetings in public, make sure you’re fully aware of who’s sitting within earshot.

Create your target list carefully

Lining up a few potential buyers can create a bid-type scenario when you sell a business, often meaning you sell for maximum value. A skilled corporate finance adviser will be able to locate multiple buyers in a way that still maintains confidentiality.

However, consider the adviser’s process and make sure you have control over who they approach. Will they be advertising you on websites? For most companies, it’s not advisable to anonymously advertise your business, especially if your business does something highly specialised – because it won’t take rocket science to work out who you are!

It may be tempting to try and sell your business on your own, but it is vital to understand that doing so can potentially damage your business reputation. An experienced adviser knows how to shield your business from breaches of confidentiality and still get you the best results.