Business Buyers, their Financial Information, and the release of “Confidential” Information
Every day we have people calling or emailing us, inquiring about one of our business listings. Due to confidentiality issues, we are not at liberty to immediately discuss the business, other than providing general information and some interesting qualities about that business which is essentially a rehash of whatever information is in one of our ads. That is until we back our buyer documents. These documents, consist of a confidentiality agreement (restricts an interested party from telling anyone anything that they learn about the business), an agency disclosure (indicating that we represent the sellers), and a buyer profile (a little bit about the buyer and his/her interests, experience and finances).
Most people understand that we need the confidentiality and disclosure agreements signed, but some question the reason they should provide their financial information to us, based solely on an inquiry into a business. While I understand and appreciate this concern, it is part of our obligation to our sellers that we only release their confidential and financial information to people who can feasibly purchase their business.
The next step is for the listing broker to “interview” the buyer to make sure they are 1) a “qualified” buyer and 2) a good fit for the business/seller we are representing. If all seems good, we will now send the buyer the “Confidential Business Review” (CBR). The CBR is a document prepared by Entrust Associates, in collaboration with the seller, that tells “the story” of the business. The CBR makes the business, economic, and financial case for the business acquisition.
The goal here is for the CBR to generate enough curiosity and interest with the buyer that he/she will request or agree to a meeting/conference call with the seller. The meeting! That’s where the “MAGIC” happens! That is, the matching of our sellers with the right buyers or our buyers with the right sellers.