Getting the Most Out of Confidentiality Agreements
When it comes to buying or selling a business, a solid confidentiality agreement is a must. A key way that business brokers and M&A advisors help buyers and sellers is through their extensive knowledge of confidentiality agreements and how best to implement them. In this article, we will give you an overview of what to expect out of your confidentiality agreements.
A confidentiality agreement is a legal agreement that essentially forbids both buyers and sellers, as well as related parties such as agents, from disclosing information regarding the transition. You should have a confidentiality agreement in place before discussing the business in any way and especially before divulging key information on the operation of the business or trade secrets.
While a confidentiality agreement can be used to keep the fact that a business is for sale private, that is only a small aspect of what modern confidentiality agreements generally seek to accomplish. Confidentiality agreements are used to ensure that a prospective buyer doesn’t use any proprietary data, knowledge, or trade secrets to benefit themselves or other parties.
When creating a confidentiality agreement, keep several variables in mind:
- What information will be excluded
- What information will be disclosed
- The term of the confidentiality agreement
- The remedy for breach, and
- The manner in which confidential information will be used and handled.
Any effective confidentiality agreement will contain a variety of key points. Sellers will want their confidentiality agreement to cover a fairly wide array of territory. or example, the confidentiality agreement will state that the potential buyer will not attempt to hire away employees. In general, this and many other details, will have a termination date.
The specifics of how confidentiality is to be maintained should also be included in the confidentiality agreement. Parties should agree to hold conversations in private; this point has become increasingly important due to the use of mobile phones and in particular the use of mobile phones in out-of-office locations. Additionally, it is prudent to specify that principal names should not be used in outside discussions and that a code name should be developed for the name of the proposed merger or acquisition.
Safeguarding documents is another area that should receive considerable attention. Digital files should be password protected. All paperwork should be kept in a safe location and locked away for maximum privacy when not in use.
In their enthusiasm to find a buyer for their business, many sellers have overlooked the confidentiality agreement stage of the process. Most have regretted doing so. A confidentiality agreement can help protect your business’s key information from being exploited during the sales process. Any experienced and capable business broker or M&A advisor will strongly recommend that buyers and sellers always depend on confidentiality agreements to establish information disclosure perimeters.
Copyright: Business Brokerage Press, Inc.
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How to Optimize Your Chances of Selling Your Business
Selling your business is likely to be the single most important financial decision you’ll ever make. Therefore, you must prepare far in advance. Let’s look at some of the key items you’ll want to consider before placing your business on the market.
Settle Legal Issues
When it comes to selling a business, legal issues should be at the forefront of your thoughts. After all, selling your business does involve the creation and execution of a complex and detailed legal agreement. There are many times in life where it is possible to cut corners, but hiring a good lawyer or law firm is not one of those times. Moreover, you’ll want to settle all litigation, environmental issues or other issues that could potentially derail a sale.
Deal with Serious Buyers
Working with a good business broker or M&A advisor is an essential part of the selling process, as these professionals will help you to weed out “window shoppers” as well as prospective buyers who are simply not a good fit for your business. Any serious buyer should be willing to submit a Letter of Intent. Everyone should be on the same page as far as price and terms as well as what assets and liabilities are to be assumed. This second point reinforces the first point. An experienced lawyer is essential to help guide you through various aspects of the sales process.
Be Flexible on Price
Be prepared to accept a lower price than you might ideally want. There are many reasons that this may occur, ranging from a lack of management depth and a lack of geographical distribution to a dependence on a limited number of clients. Reliance on a small number of customers and/or clients can give potential buyers pause, as it could raise concerns regarding the stability of your business. Addressing these issues years before placing your business on the market can help you achieve the price point you desire. This is yet another reason to work with a business broker in advance.
Improving Your Chances for Success
The are other steps you can take to enhance the value of your business. Increasing the visibility and profile of your business is always a savvy move. Consider attending trade shows, boost your online profile by stepping up your social media game and explore creating a coherent public relations program.
Finally, selling a business is often a waiting game. You have to be psychologically prepared to wait a considerable period of time before your business is sold. Most businesses sit on the shelf for a considerable period of time before they are sold.
Preparation, patience and good organization will dramatically increase your chances of selling your business and achieving a satisfying price. The sooner you begin organizing your business and working with experienced professionals, the greater the chances of success will be.
Copyright: Business Brokerage Press, Inc.
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Georgia Named Top State for Business
ATLANTA – The State of Georgia has shattered its own record by being named No. 1 for business climate for the eighth consecutive year by Site Selection magazine.
In 2019, Georgia became the only state to earn this distinction seven consecutive times in the history of Site Selection’s rankings, and it is now the only state to receive the honor eight times in a row. Governor Brian P. Kemp’s announcement on Nov. 12 followed a tour of Bridgestone Golf’s headquarters and research and development facility in Covington, Georgia, where the Governor was also presented with golf balls stamped with the “No. 1 State” artwork to commemorate the occasion.
“I’m so proud that Georgia has earned this top business distinction for a record-setting eight years, and it is an honor to accept this award from Site Selection magazine,” said Gov. Kemp. “Our top-notch workforce development programs and pro-business environment, along with our strong logistics infrastructure, have further solidified the Peach State as the best place in the nation to live, work, raise a family, and start or grow a business. I thank our partners in both the public and private sectors, our world-class economic development team, and the hardworking Georgians throughout the state who helped us beat our own record with this unprecedented achievement.”
Site Selection magazine is an internationally circulated business publication covering corporate real estate and economic development. The publication’s rankings are 50% based on an index of seven criteria and 50% on the input received from a survey of independent site location experts who are asked to rank states based on their recent project experiences. This year, Georgia shares this top ranking with North Carolina.
“Our readers are keenly interested in our annual state business climate ranking, because they seek locations with the greatest prospects for success,” said Site Selection Editor in Chief Mark Arend. “Georgia’s eighth consecutive Top State Business Climate win reminds them that a Georgia location will contribute to their productivity and profitability long term.”
In a survey published with the rankings, workforce skills were the most important criteria to site selectors for the fifth consecutive year, with workforce development programs coming in second place. Transportation infrastructure, ease of permitting and regulatory procedures, along with state and local taxes completed the top five issues of importance to the process.
President and CEO of Bridgestone Golf Dan Murphy hosted Governor Kemp, alongside First Lady Marty Kemp, and members from both the Georgia Department of Economic Development (GDEcD) and Site Selection magazine, as they safely celebrated these accolades. The event also highlighted Bridgestone Golf’s continued success in the state as they celebrate their 30th anniversary in Covington. The Georgia Made™ company employs nearly 160 Georgians and has continued to make new investments in research and development. Earlier this week, Bridgestone re-signed Tiger Woods and Bryson DeChambeau to long-term contract extensions, which includes DeChambeau significantly increasing his involvement in Bridgestone’s R&D processes for developing new golf ball technology.
“Georgia’s success is thanks to a long, proven track record of our state doing things the right way,” said GDEcD Commissioner Pat Wilson. “Whether entering or expanding in Georgia, it’s our goal to give every company we work with the peace of mind they need to know that they will have a long-term partner in the state.”
Site Selection magazine joins Area Development magazine in naming Georgia the top state for business for 2020 – the eighth and seventh consecutive year, respectively, that both publications have awarded Georgia the top ranking. Earlier this week, Governor Kemp also shared that Georgia remains on a record pace for economic development investments and job creation in the state during fiscal year 2021, increasing investments by 56% and jobs by 45% compared to the same timeframe last year.
About GDEcD
The Georgia Department of Economic Development (GDEcD) is the state’s sales and marketing arm, the lead agency for attracting new business investment, encouraging the expansion of existing industry and small businesses, locating new markets for Georgia products, attracting tourists to Georgia, and promoting the state as a destination for arts and location for film, music and digital entertainment projects, as well as planning and mobilizing state resources for economic development. Visit www.georgia.org for more information.