A key consideration in selling your business is confidentiality. First, you must decide whether or not it is necessary to keep your decision to sell confidential. If so, you must determine how to communicate this decision, or if to communicate it at all. Your business has different publics – customers, employees, competitors, suppliers, and creditors – each of which can react favorably, unfavorably, or indifferently in learning you are offering your business for sale. This in turn can reduce employee performance, sales, competitive strength, and lines of credit.

Your customers may feel uncertain about continuing with your company and take their business elsewhere, lowering your sales and profits, which reduces the final sale price of your business.

Like customers, your employees may also feel uncertain about the company’s future. As they focus on employment elsewhere by shopping for new jobs, their performance drops, and buyers incorporate this by negotiating down your final sale price.

Your competitors will have a field day in learning you are selling your business, portraying your company as one whose future is uncertain, while raiding your cherished list of customers and roster of employees by offering themselves as a company with a certain future. And remember that they might get this information from your customers or your employees.

If your suppliers learn of your selling plans and assume your business has financial difficulties, they may tighten their credit terms or demand cash on delivery, affecting your cost of goods, your profits, and your sale price.

These are possibilities for you to take into consideration. More likely, your customers will remain loyal, employees will keep their resumes dusty and outdated, and competitors and suppliers will neither react nor pay any attention. But it is your duty as the seller to utilize confidentiality in the most profitable way. After having decided to sell, you may want to test reactions by limiting or controlling the information about your decision to small groups at first. Once you know how people will react, it is up to you, as the seller, to use your best judgment when contemplating confidentiality. In most cases, you will find it is very important.