August 2010 Newsletter
Your Discretion is required
Confidentiality is a critical element in the sale and purchase of a business. Over the years in our office, we have sold hundreds of businesses and, for the most part, we have been able to limit the sharing of information to only those parties involved in a transaction. However, even with our diligent efforts and legal confidentiality agreements, some people feel the need to gossip or use confidential information in an illegal or unethical manner. Others may simply mention that a particular business is for sale in casual conversation with friends without considering or understanding the impact on the business if this information is made public.
To those who have never owned a business, it may seem that sellers and their advisors overreact when it comes to ensuring confidentiality. Consider, however, that business owners have expended tremendous resources to start, grow, and mature their businesses. Perhaps they have spent years gaining name recognition, developing a customer base, establishing critical supplier relationships, and hiring and training employees. A breach of confidentiality can put these alliances in immediate jeopardy. A loss of any of these relationships could cause the business to become less desirable. Buyers may then lose interest in purchasing the business, leaving the seller with a devalued business and a solid court case against the source of the breach. In the end, the breach has only negative consequences for both buyer and seller.
If you are a buyer who has been working with an Apex advisor for an extended period of time, feel free to request a copy of your Non Disclosure and Confidentiality Agreement from your advisor so that you may review your obligations under the Agreement. We are here to assist in the acquisition process, so feel free to call your Apex advisor if you have any questions.
Recent Transactions Completed
Computer Services – Kansas City, MO
Liquor Store – Miami County, KS
Excess Inventory Sales Company – Lee’s Summit, MO
Fence Company – Denver, CO
