Most profitable businesses sell for prices much higher than the value of their hard assets. This supplemental value is called goodwill. A company's goodwill reflects all the intangible factors that are responsible for the company's success. This goodwill could be substantially harmed if employees, customers, suppliers or other stakeholders in the company hear rumors about the company being for sale. The employees might start worrying about the security of their jobs and might leave the company. Customers might question the new owners' ability to deliver the same quality and standard of services/products and might look for new suppliers. Even suppliers might reduce their payment terms as a result of uncertainty about the new ownership capabilities and intentions. For all these reasons, confidentiality is a must in selling a business. Only at the right time, should the owner inform different stakeholders about the sale of the company. The seller/broker should make sure not to to advertise any information about the business that could make it identifiable. Potential buyers should be screened and should sign a confidentiality agreement before receiving any information about the business. This is generally very difficult to do by the business owner him/herself. The business broker has experience with buyer screening and selection, and will ensure that confidential information does not end up in the wrong hands.
2. Selling Business Shares or Assets
The first decision to make is whether to sell assets or shares. Consulting with an accountant will help you make an adequate decision.