I recently had a potential buyer ask for more detailed information on the marketing plan and marketing materials for a business purchase opportunity that he was reviewing. The buyer had signed an NDA/Non Compete and just wanted to review more about how the business got their customers before deciding on making an offer. However, the seller did not want to release anymore details about his marketing plan and marketing materials. He stated that was his only competitive advantage and did not want to release that material until the buyer had made a deposit, escrow was opened and he was approved to take over the lease by the landlord. He stated that after all, why should he show his proprietary information to someone who doesn't qualify with the landlord to take over the lease?
So I ask, does the due diligence period cover marketing materials? In most cases, it's financial information that's under review. As well as customers, and contracts, but do you see most sellers reserving some of its competitive marketing advantage disclosure until the due diligence phase.
Even though someone has signed an NDA do you see your sellers hold this info back or release it to prospective buyers who have signed an NDA?
In most cases, small businesses don't have any proprietary marketing methods. They rely on walk-by traffic, some social media and signage, but in rare instances a businesses success is highly dependent on a marketing method or two that the current seller has discovered.
How do you get interested prospects to move further along in the business buying process without showing the details of the marketing plan?
I look forward to seeing your responses above, thanks!