Business broker
Greg Carpenter with Business Team submitted this information on why confidentiality is so important to all parties in a transaction. Too many buyers, brokers, agents don't realize how important this aspect is to getting a deal done without damage!
A portion of Greg's submission:
What can happen if confidentiality is breached? Here are some things that have happened:
• Primary vendors put the business on COD terms causing a major financial crisis for the owner.
• Half of the employees quit in a panic because someone started a rumor that the new owner was going to fire everyone (never true, but employees don’t know that) – rather than wait to be fired, they sought and found new jobs. The owner was unable to operate the business profitably.
• Competitors have used the fact that the owner was selling to sell against the business, pointing out to prospective customers that any guarantees would be worthless after the sale (not true, but scares customers and may influence their purchase decisions).
• Employees found the offering information left behind by a prospective buyer. When they learned how profitable the business was, they demanded pay increases from the owner!
• The word got around inadvertently to employees, who started stealing large quantities of cash and merchandise, thinking that the owner would be gone before he discovered it.
For the entire article go to:
http://www.bizben.com/articles/88-confidentiality.php
Do you have stories, situations where confidentiality was broken? Please
comment below and let the BizBen Blog readers know your opinion - or stories of how a breach of confidentiality affected a deal you were or are working on.
Posted on June 4, 2008 | 
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