{"id":95,"date":"2023-06-19T16:31:00","date_gmt":"2023-06-19T16:31:00","guid":{"rendered":"https:\/\/www.adcorporatefinance.com\/allison-dent\/?p=95"},"modified":"2024-09-23T17:25:20","modified_gmt":"2024-09-23T17:25:20","slug":"allison-dent-how-much-information-do-i-need-to-share-in-order-to-sell-the-business-not-just-get-an-offer","status":"publish","type":"post","link":"https:\/\/www.adcorporatefinance.com\/allison-dent\/2023\/06\/19\/allison-dent-how-much-information-do-i-need-to-share-in-order-to-sell-the-business-not-just-get-an-offer\/","title":{"rendered":"Allison Dent: How much information do I need to share in order to sell the business (not just get an offer)?\u00a0"},"content":{"rendered":"\n

How much information do I need to share in order to sell the business (not just get an offer)? <\/strong><\/p>\n\n\n\n

Once a seller has accepted an offer, the\u00a0 due diligence process will quickly ensue.\u00a0 Sellers often feel like the list of buyer questions about the business is endless and quite frankly, more than exhaustive. Is it really necessary to disclose every detail of your business when selling it?

Here are a few best practices for handling information sharing during due diligence and up to closing.<\/p>\n\n\n\n

Plan it:<\/strong> The due diligence process can be quite disruptive to day to day operations.  That is why planning the release of key information should be part of the pre-sale process.   Prepared and serious sellers gather up all the key information that will be needed to complete the sale in electronic format and a list of the information that isn\u2019t available.<\/p>\n\n\n\n

Stage it<\/strong>: Buyers are happy to receive the information in a structure manner.  Plan to provide them with the easiest to find details first, the more challenging or sensitive documents (such as employee contracts and client engagements) later;  any information such as financial statements, taxes, key contracts or agreements, should be availed early on in the due diligence so that there is plenty of time for questions and there are no surprises for either side.<\/p>\n\n\n\n

Track it<\/strong>: You\u2019ll want to keep evidence of all the details you provide, as well as all the versions, when they were given and to whom.  Technology platforms are available to facilitate this or you can do the same with a file sharing system.  You\u2019ll want to be able to show you shared the information in a timely manner and that you\u2019ve nothing to hide.<\/p>\n\n\n\n

Database it:<\/strong> Secure the information in a way that the buyer can make copies and work on it; many of the details you\u2019ll share will be worksheets and the buyers will be looking to check for formula errors or simply to be able to manipulate the file based on their assumptions.  A database is great for the seller as you can often see who has accessed the file when, providing you with confirmation that the buyer is doing their job on time to close the deal as anticipated.<\/p>\n\n\n\n

Limit it:<\/strong> For both the seller and the buyer teams, limit the access to information to only those who need to know.  There may be a variety of professionals that are looking at the details, but keep in mind not all of them need to see all the information. The buyer will confirm which of their members will review the details and it is good practice that access be granted to only those select individuals who truly must review it.<\/p>\n\n\n\n

Handle it:<\/strong> If you do have highly sensitive details and data, don\u2019t think to simply burry it.  The best approach is to discuss it with your buyer, provide the supporting materials and come up with a plan together. Example of exceptionally sensitive topics would be privileged details regarding a contract under negotiation, discretionary or exceptional expenses, human resource details, litigation. Keep in mind potentially delicate topics are a great way to really get to know and build trust with the future owner.<\/p>\n\n\n\n

Conclusion<\/strong><\/p>\n\n\n\n

Although due diligence is a challenging deal hurtle, sharing data is the best way to ensure that the buyer knows everything about the business and won\u2019t back out of a transaction.  If you don\u2019t have proof of a detail, simply say so as there are other ways to deal with it.   However, be sure to share as much as possible and when in doubt, disclose.  The above best practices will help make it less painful for you and get you to the finish line.  <\/p>\n\n\n\n

Follow us on Facebook<\/a>, X<\/a>, Instagram or Linkedin<\/a>.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

How much information do I need to share in order to sell the business (not just get an offer)?\u00a0<\/p>\n","protected":false},"author":1,"featured_media":96,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,7],"tags":[5,3],"class_list":["post-95","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advisor-of-entrepreneurs","category-allison-dent","tag-allison-dent","tag-ma","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/posts\/95","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/comments?post=95"}],"version-history":[{"count":4,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/posts\/95\/revisions"}],"predecessor-version":[{"id":101,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/posts\/95\/revisions\/101"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/media\/96"}],"wp:attachment":[{"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/media?parent=95"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/categories?post=95"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.adcorporatefinance.com\/allison-dent\/wp-json\/wp\/v2\/tags?post=95"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}