| If, after learning the basics about your company, | | | | offering, do they make a reasonable case for |
| a prospect is interested in buying your business, | | | | their objection or are they just fishing for a low |
| they will begin to respond with questions and | | | | ball price |
| requests for more specific information. | | | | Eventually you will accept a Letter Of Intent from |
| This creates a problem: The prospect has a | | | | just one buyer and enter into an exclusive |
| legitimate need for details about your business | | | | negotiation. At that point (and during Due |
| and you have a legitimate need to make sure | | | | Diligence) you will have to reveal all the details and |
| sensitive information doesn't get into the wrong | | | | secrets about your business. If you can't see |
| hands. | | | | yourself making this kind of a commitment to a |
| Consider that of all the prospects you talk to | | | | particular buyer than there is no need to go any |
| about your business, only one will actually buy it. | | | | further - cut them loose now! |
| But all the other prospects will still posses the | | | | Balance The Buyer's Need for Information With |
| knowledge you shared with them and you can't | | | | Your Need For Confidentiality |
| afford to have confidential information such as | | | | Sometimes you will get requests for information |
| customers lists, recipes or other trade secrets | | | | from a very good buying prospect that you just |
| getting in to the wrong hands. | | | | can't fulfill. For example, after he receives your |
| So managing the disclosure of information about | | | | Selling Memorandum, the buyer may request to |
| your business and making judgments along the | | | | see a list of your customers or suppliers. |
| way as to which prospects deserve your time | | | | You must determine why the buyer wants this |
| and attention are important keys to successfully | | | | very specific information. Does he want to steal |
| selling your business. | | | | your customers from you? Or perhaps (and more |
| Here are some things you can do to identify the | | | | likely) the buyer wants to see if you are overly |
| best prospects and provide them with just | | | | dependent on one customer. If 80% of your |
| enough information to move them through the | | | | revenues come from just one or two clients, that |
| buying process. | | | | is a legitimate red flag that would concern any |
| Ask The Buyer To Submit Their Questions And | | | | buyer. |
| Requests For More Details In Writing | | | | But your prospect doesn't need a complete list of |
| In order to protect your confidentiality, I strongly | | | | you customers along with contact information to |
| suggest that you tell the buyer to put his | | | | find this out. Instead, you can prepare a report |
| requests/questions in writing. Doing it this way: | | | | that shows what percentage of your revenues |
| Allows you to think through your responses | | | | comes from each customer (or the top 10 or 20 |
| more thoroughly before responding | | | | customers if that's more appropriate). |
| Prevents you from spilling too much | | | | So, whenever a buyer makes a request for an |
| information off the top of your head | | | | entire category of information, don't flatly refuse. |
| Means you won't get interrupted at the | | | | Instead, try to figure out the buyer's specific |
| wrong time - imagine if 5 buyers have your selling | | | | need or concern and then provide just enough |
| memorandum and each called you at your office | | | | information to satisfy that need. |
| whenever they thought of a new question. | | | | In addition to the names and contact information |
| Puts all your communication in writing, so | | | | of your customers and suppliers, information that |
| there is less chance of misunderstandings - you | | | | should be off limits until a buyer signs a Letter Of |
| can always refer back to what you actually | | | | Intent should include all proprietary information |
| wrote instead of trying to remember what you | | | | regarding your manufacturing processes, |
| said days or weeks ago. | | | | blueprints, recipes, product diagrams. |
| Saves you time - certain questions will come | | | | Remember: Only one of your prospects will end |
| up again and again. By putting your answers in | | | | up buying your business. But all the other |
| writing you will have a pre-written response ready | | | | prospects will still posses whatever information |
| whenever a second or third prospect asks the | | | | you give them after they drop out. |
| same question. | | | | So a good question to ask yourself when deciding |
| So, try to keep the initial communication after the | | | | whether or not to provide certain information to |
| Selling Memorandum confined to e-mail: it's quick, | | | | a prospect is: |
| confidential and allows you the time to think | | | | If this person does not buy my business, could |
| through your responses carefully. | | | | they use this information to harm my company's |
| Continue To Qualify The Buyer Throughout The | | | | value or the success of the new owner? If a |
| Process | | | | buyer absolutely insists that you provide a certain |
| An additional benefit of asking prospects to | | | | piece of information that you are uncomfortable |
| submit their questions in writing is that it is | | | | providing, you have three choices: |
| provides another opportunity qualify the buyer. | | | | 1.) You can flatly say "no" and risk losing him as a |
| A professional will understand your request and | | | | prospect. |
| gladly cooperate. Many buyer prospects already | | | | 2.) You can give him the exact information he |
| own, or have owned, a business and know the | | | | asked for |
| importance of confidentiality. | | | | 3.) You can prepare a report that provides just |
| An unprofessional prospect on the other hand will | | | | the information you are comfortable revealing and |
| often resist this request and pout about the | | | | hope that it will satisfy the buyer's need. |
| "inconvenience". Also, the weak prospect will often | | | | Exactly how you handle a situation like this will |
| submit poorly written or unclear requests | | | | depend on the quality of the prospect who |
| questions. Even though you did some qualifying | | | | makes the request. You should rank all your |
| before you sent the prospect your Selling | | | | prospects according to their qualifications and |
| Memorandum, continue to observe the buyer: | | | | desirability - Which prospect do you want to take |
| **When they do communicate with you, is it | | | | over your business? You may decide to give that |
| obvious they have taken the time to prepare | | | | prospect much more detailed information than the |
| their questions and comments or does it seem | | | | buyer at the bottom of your list. |
| like they are flying by the seat of their pants? | | | | But whatever you decide, make sure that the |
| **Do they respect your time and your need for | | | | buyer understands you are not trying to hide |
| confidentiality or do they call or show up | | | | anything. There is certain information that you are |
| unannounced? | | | | uncomfortable releasing now, but that once the |
| **If they take issue with your price, recast | | | | buyer has submitted a Letter Of Intent he will |
| financial statements or other elements of your | | | | have complete access to your business. |