After starting (or buying) a business, you’ve put in the effort and resources to raise its value, and you’re ready to make a profit through selling it. There’s just one problem, though: you have a lot of private information tied up in the workings of the business, and you need to keep things ticking along (and let people see them) without putting any of that data at risk.
- How to Maintain Confidentiality When Selling a Business
- Data Protection Issues When Selling a Business
- How to Reduce Admin In Your Business
For example, consider payment information. What accounts could you have configured to pay software subscriptions, equipment and/or property rentals, and any other business expenses? And that’s just a glimpse of what you’re putting on the line whenever you provide insight into the company, which is why it’s so important to be careful.
In this post, we’re going to look at some key tips for protecting your important files while you’re selling a business. Let’s get started:
Don’t give potential buyers admin access
Now that many business operate either primarily or exclusive online (a trend that’s only become greater due to the 2020 pandemic), a potential buyer who wants to see the inner workings of a business they’re considering might not be able to visit that business for a tour — and simply going to the website isn’t much, because anyone can do that.
The desire to see behind the scenes might push them to ask for access to the website on a temporary basis so they can check out how everything works and test available functions. Allowing them that level of access would be incredibly risky, because they could access anything during that time and even potentially lock you out.
If they simply have to see the inner workings, use the safest approach you can: take them through the system by sharing your screen remotely. That way you can get as in-depth as they need without ever allowing them control over what’s happening. Be sure to protect your connection, though: handle it via a VPN with enough speed for high-resolution screen sharing, such as a VPN designed for torrenting (more info on torrenting here).
Provide redacted materials where possible
At various points in the sales process, you might be asked to provide evidence of anything from the registration of your business to your revenue figures for a particular quarter. If you ultimately need to provide that evidence — maybe there’s a huge offer on the table, for instance — then you should ensure that you redact the documents as heavily as you need to.
This may meet with some objections, but until they’ve actually purchased the business, it isn’t reasonable for them to expect that level of insight. If they’re so suspicious of you that they won’t take redacted evidence, how can they believe that the business you run is worth their time? The only viable alternative is to use a go-between — some company you both trust — to review your evidence and confirm it’s legitimacy on your behalf (though that definitely shouldn’t be needed).
Use secure and regularly-changed passwords
While you’re trying to market your business, you’re telling anyone who’ll listen that you have this exciting and profitable asset ready to use, and that can attract criminals eager to identify vulnerabilities and take advantage of them. One obvious vulnerability is having weak or static passwords to your online systems. Change your passwords fairly frequently to be safe.
In addition to that, be mindful of your password reset processes. Even if someone doesn’t have your password, they might be able to use failsafes to gain access if they can learn the answers to your security questions — answers they might be able to glean through asking questions that seem reasonable enough in the context of learning about your business.
Fully check through any office space
In the event that your business does have some office space, you need to make a concerted effort to check through it to confirm that you haven’t overlooked some sensitive file. Perhaps at some point you printed off a document with financial information on it and didn’t notice it slip down the back of a desk — a desk that a buyer of the business might well want to replace (or at least move), allowing them to discover that document.
When you’ve agreed a sale, you should have figured out which items will be left and which will be taken with you, so you might need to go to the office anyway. Even so, double-check — triple-check, even — that there’s nothing important left behind.
Detach any associated personal accounts
Lastly, as I noted in the intro, it’s common for businesses to have various recurring payments set up, and that’s not so bad when they’re going through company accounts — as those accounts should be handed over when the business is sold — but that isn’t always the case. Solo entrepreneurs and/or inexperienced business owners in particular can make the mistake of using personal accounts for business purposes.
If there’s any chance that you made that mistake at some point, take some time to review all the ongoing business payments and ensure that nothing is coming out of your personal account. You should also take the opportunity to remove any personal account details from financial management tools so you don’t need to worry about them being found by the eventual buyer.
Now more than ever before, keeping sensitive files safe while selling a business is exceptionally important. By following the steps we’ve outlined here, you should be able to achieve a solid level of security for the files you’re trying to protect, allowing you to focus on selling your business for an excellent price and moving ahead with your plans.