Top 10 Ways to Protect Confidentiality When Selling

Top 10 Ways to Protect Confidentiality When Selling

It is essential to protect your company’s confidentiality throughout the sales journey. Otherwise, it could compromise the value of your company and cause major disruptions in business operations, which can turn potential buyers away from making offers. In this review, we discuss 10 ways you (the seller) can protect confidentiality when selling your company. 

Work With a Business Broker

First and foremost, you should choose a business broker before you begin your sales journey. This is, in almost every case, essential to ensuring your company’s private information remains confidential throughout the sale. We discuss the importance of a business broker throughout this guide, and choosing one you can trust and that has a proven track record of successful confidential sales is an integral starting point. 

Have Potential Buyers Sign a Non-disclosure agreement (NDA)AdobeStock 270461035

A non-disclosure agreement (NDA) is a legally-binding document that prohibits any party who signs the agreement to disclose information in a private document, video, etc. This is essential to ensure any potential buyers do not release information about your company to the public or use your private information against you. For instance, if you have proprietary and innovative information and a competitor who is considering purchasing your company uses that information against you after signing an NDA, then it could be a violation of the agreement. 

Use Confidential Contact Methods

A common mistake sellers make is using their private contact information, such as the company email, phone number, etc. This leads to issues with confidentiality, and in many cases, news of the business sale quickly becomes public. Instead, sell through your business broker, who can protect the specific and private details of your company. If you do contact potential buyers directly, use a private and separate contact method that is confidential. 

Create a Confidential Information Memorandum (CIM)

A confidential information memorandum (CIM) is a marketing document that provides potential buyers with a detailed first impression of your business. This selling memorandum features an in-depth description of the business and its operations. It also details the company’s history and financial information. Potential buyers who view the CIM first sign an  

Create a Confidential Video Interview (CVI)

A confidential video interview (CVI) goes along with your CIM to provide potential buyers with a comprehensive view of your company. By combining the sales memorandum with a video interview and facility tour, potential buyers can quickly see the worth of your company and understand why your asking price is fair. A CVI is protected because all potential buyers first sign a non-disclosure agreement. This means they cannot disclose information in the video or use proprietary information (or other forms of industry innovations) against you. 

Bring in Your Chief Financial Officer (CFO) and Bookkeeper 

Potential buyers are going to need to understand the financial aspects of your company. If you have a chief financial officer (CFO) and/or bookkeeper (or someone else that helps you with the day-to-day finances), then it is helpful to bring them into the selling process. Although you do not want to discuss the sale with too many employees, this may be necessary. Of course, this also applies to your certified public accountant (CPA) as well. 

Limit Access to Privileged InformationAdobeStock 357509346


Potential buyers need access to a large portion of your company’s information (financial, legal, etc.). However, you can provide them with this information while still not providing access to the most private and specific details of your company. In fact, your business broker can likely keep your company’s name and specific location private until you have a signed letter of intent (LOI). 

Tell as Few Employees as Possible

This is an important point to make following the one above. There are times when you must bring certain employees into the sales process. However, you want to limit the number of employees you notify of the sale. For many business owners, this is one of the most challenging aspects of the sale, particularly when they have strong relationships with their employees. However, it is necessary. Behind the scenes, you can fight for their best interest in negotiations and notify them when the time is right. 

Tell The Customers at The Appropriate Time

You may need to tell existing customers about the sale before closing. In particular, this refers to your long-term customers, especially those that make up a large portion of your profits. This is usually necessary during due diligence. Otherwise, the buyer may fear the customer backing out of a contract or regular operations due to being blindsided by the change in ownership. 

Maintain Business as Usual

Last but not least, you should maintain business as usual the best you can. This helps ensure there are no dips in profitability that could affect your company’s value and helps prevent customers and employees from becoming suspicious about the future of the company. 

Sigma Mergers and Acquisitions Can Maintain Your Confidentiality

Sigma Mergers and Acquisitions has decades of experience with business sales and understands how to maintain confidentiality throughout the entirety of the sales, while still ensuring the use of effective methods that avoid setbacks and help ensure a purchase agreement as quickly as possible. Contact us today to get started with a free, no-obligation business valuation.

Scot Cockroft Business Broker
Hi, I’m Scot Cockroft.

When I founded Sigma Mergers and Acquisitions back in 2003, I had sold my business the year prior.

Now, that can sound good, but let me tell you, back in 2003, it was not easy to sell a business. Not that I’m saying in modern day times it’s easy to sell a business, but back then I interviewed broker after broker after broker, and no one was interested in actually seeing the value that my business brought to the table.


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Sigma is a the leading business broker in with Corporate offices in Dallas/Fort Worth with roots from 1984. Over 600 businesses sold in Dallas, Fort Worth, Texas, Oklahoma and across the South. Sigma provides full business brokerage services with NO upfront fees. We provide Market approach business valuations for business sales. Sigma is passionate about helping business owners achieve their goal of financial security. Contact us today for a free no obligation business valuation. We are here to help you achieve your goals.

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