From the Desk of Josh Grode Wolters, MBA:

When you decide to sell your small business, keeping the news quiet until the right moment is crucial. Here’s why and how to manage the confidentiality.

Why is Keeping the Sale Private So Important?

Think of it this way: once people know you're selling, you risk losing control of your business's stability.

• Employee Jitters: If your team hears rumors, they might lose faith in you, get worried about their jobs, and start looking for new work. This can crush morale and performance.
• Customer Concerns: Your loyal customers might get nervous about the change, wondering if the quality or service will drop. They might decide to switch to a competitor.
• Competitor Attacks: Your rivals will see this as an opportunity to steal your best employees and your best clients.

In short, a leak can severely damage your business's value and make it harder to sell.

Is a Confidentiality Agreement (NDA) Enough?

A signed Non-Disclosure Agreement (NDA) is absolutely essential. This is a legal document where potential buyers promise to keep your private business information secret.

However, an NDA is not a magic shield. It's just one piece of your strategy. You still need a plan to manage who sees what and when, because sensitive information can always leak out over time.

Take Control of the Story!

You want to be the one who decides what people hear and when they hear it. By managing the sale process tightly, you can:

• Frame it Positively: When you finally announce the news, you can present it as a positive move for the business's future (e.g., "The new owner will bring in resources for growth!").
• Keep Trust: Telling your key people yourself at the right time shows respect and helps you keep their loyalty.
• Maintain Focus: Tell a clear, simple story that shows why this sale is good for everyone—your employees, your customers, and you.

Action Plan: How to Keep it Secret Before You Start Selling

• Get Ready to Sell FAST: The longer your business is on the market, the higher the chance of a leak. Spend time preparing your records and financials before you officially list the business. A clean, organized business sells quicker.
• Prepare Your Employees (The Right Way): You will need to tell key employees eventually. The good news is that employees understand that owners eventually want to move on. New ownership often means new opportunities for driven employees to step up.
• Use an NDA: Make sure your lawyer drafts a strong NDA, and every single person who looks at your financial information must sign it.

Action Plan: How to Keep it Secret Once the Sale Starts

• Be a Gatekeeper: Only release business information on a "need-to-know" basis. Don't dump every file on a potential buyer all at once. Release information gradually as the buyer gets more serious.
• Limit Who Knows: Keep the circle of people inside your company who know about the sale extremely small. Like zero people small.
• Act Fast on Leaks: If you hear or suspect a rumor, talk to your broker and address it immediately to limit the damage.

Last week Murphy Business brokers from around the country added ten new listings. Click on the list below to send an email if you'd like more information on any of these:

Buy a Business

Sell a Business

As always, I'm looking forward to hearing from you soon!

Happy Friday,

Josh

--

JOSH GRODE WOLTERS, MBA

Partner - Business Intermediary - Valuation Specialist

j.grode@murphybusiness.com

(605) 951-9555

2121 W 63rd Pl, Suite 100

Sioux Falls, SD 57108