Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

February 8, 2020

Why Confidentiality?

By Jeremy Albelda

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Webster’s Dictionary defines confidentiality as “secret, private; enjoying or treated with confidence.”  Often times an owner looking to sell his business will say to us, I’m ready to sell my business, and I want to tell my employees, customers, and the world.  STOP RIGHT THERE.

We want to maintain confidentiality throughout the entire business valuation and selling process for a number of reasons.  Let’s look at a few groups of people and why confidentiality is so important.

  • Employees – Owners will say they value their employees and want to keep them in the loop as they look to sell their business. What happens in that case is that employees, after hearing the business is for sale, will go home that night, write a resume, and look for another job.  If the employee leaves, the owner must spend time and resources to replace the employee.  Our experience has been that when confidentiality has been maintained, most employees will stay.  They know the new buyer has spent a lot of money to acquire the business.  Buyers are not looking at keeping the business as status quo, but are looking at growing the business.  It could become a career development opportunity for employees.  Also, having a strong employee team in place lets a buyer know there are key people in key positions, which allows for a smoother transition between buyer and seller.
  • Customers – Customers are the lifeblood of a company. Sometimes an owner has spent months, or even years developing customers.  Whether a customer is short term or long term, they are essential to the profitability of the business.  If confidentiality is not maintained, and word is out that the business is for sale, customers will start to look elsewhere for the products and/or services offered by the business.  Just think, how many people would book a catering hall for an event six months away, if they knew the business is for sale? Customers might also think that just because a business is for sale, that it’s because it’s failing, rather than the complete opposite.  Maintaining confidentiality throughout the selling process takes away the uncertainty customers may have otherwise.  It is also reassuring to a buyer that a customer base exists.
  • Suppliers – Like customers, owners have spent much time getting the best suppliers and terms for their business. Maintaining confidentiality helps keep the flow of supplies coming.  Without confidentiality, and the supply world knowing the business is for sale, owners may not get the best shipping.  Favorable terms may not be offered anymore.  Suppliers may require payment up front, impacting cash flow.
  • Competition – Even though the business owner has every intention of selling, and wants the business to survive and thrive after the sale, the competition may not portray it that way. Like the old telephone game, the words they may use may not be the same as those they heard.  Also, without confidentiality, the competition may use it as a way to steal employees.
  • Lenders – Of course, all lenders want to loan money and get paid back. As with suppliers, customers, and employees, a business owner has worked long and hard to get their financing and working capital in place.  When confidentiality is not in place, a lender may recall a loan, or close a line of credit.  Maintaining confidentiality can help avoid a lending or line of credit crunch.  The loans and lines of credit get paid when the business is sold, but there is no disruption of business financing operations.

In today’s competitive business environment, maintaining confidentiality is of paramount importance.  For many business owners, they have worked and developed their business over many years.  Selling their business is a one-time event.  During the selling process, it is important for an owner to keep their focus on running their business.  Maintaining confidentiality helps avoid potential pitfalls and a smooth transition.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

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Client Testimonials

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer

“Purchasing a business through this firm was a pleasure. Gary was very professional and transparent throughout the entire process. I look forward to working with A Neumann & Associates in the future.”

William Klemens, Buyer
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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