A Confidentiality Agreement protects the Seller of a business by legally ensuring that the sensitive, proprietary, and confidential information relative to the sale of his business is kept in the strictest confidence by a prospective buyer.  Language in the document will customarily state that:    

• the information provided by the Seller will not be disclosed to another party unless that party is involved in the sale.
• all negotiations will be handled directly through the listing Broker and that no contact with the Seller or related entities to the business is permitted without direct authorization of the Broker.

• the Buyer will not take unfair advantage of any of the confidential information for the Buyer’s own benefit.

• the information is provided by the Seller and is not verified in any way by the Broker.

• prior to finalizing a purchase, it is the responsibility of the Buyer to perform due diligence and make an independent verfication of all information.

• Buyer agrees to provide a resume and financial statement, if requested, and that this information wil be held in confidence and will only be used for the purpose of Seller extending credit to Buyer.

• Buyer warrants that he has the legal and expressed authority to enter into this agreement and guarantees the performance of this agreement.

• Buyer understands that a violation of this agreement could subject Buyer to legal action by Broker and/or Seller.                                         

     

     Simply stated, a Seller is willing to share the intricacies and intimacies of his business with a prospective Buyer as long as the Buyer agrees to keep the information to himself, and not use it to gain an unfair advantage.  It is a legally binding contract, but that in itself should not be intimidating, as long as the prospective Buyer understands that the information is confidential.

 

     Take the time to read through a Confidentiality Agreement prior to signing one, just to make sure that it contains the same type of content that I’ve detailed above, and that it does not obligate you to anything that you are uncomfortable with.  Chances are that if you are dealing with a Certified Business Intermediary, the Confidentiality Agreement will be straightforward and contain only appropriate information.  Sign it with confidence to gain access to the information necessary for a succesful search for a new business opportunity.

“Blue Sky” is a perceived value that cannot be quantified or calculated…it is the, “what I’d like to get, because that’s what I think it is worth”, with no basis in market reality.  “Goodwill” on the other hand, is that portion of justifiable business value that exceeds the value of the tangible assets.  Goodwill arises as a result of name, reputation, customer patronage, location, and product or service.  They are assets that have not been separately identified and/or valued but which generate economic benefit.  Goodwill represents what can be substantiated as the value of your blood, sweat, and tears…what you have put into your company, what you have created as your own market niche, and the reputation you have earned in your industry and marketplace.    

Other intangible assets your business may have which impact the value of your business are customer lists, drawings, intellectual property, and patents.  Each of these assets is not necessarily considered part of the “goodwill” equation, but they do certainly have value.    

In some cases, the value of your business may only be the value of its tangible assets…land, buildings, furniture, fixtures, equipment, and inventory.  The best way to determine this is to consult with a Certified Business Intermediary who will assist you in digging into your books to find every conceivable intangible asset of your business that will translate first into value and ultimately into money for you.  Even if the outcome is that there is negligible “goodwill” value, and your business is worth the value of its tangible assets, at least you will be confident that you’ve looked everywhere you could for value, with the assistance of a professional trained to find virtual needles in haystacks.         

The real estate market is susceptible to fluctuations and cycles, but what good investment isn’t? As part of that cycle, periods exist in the real estate market where values are better, inventory is higher, and interest rates are lower. The Economics 101 supply and demand curve that we learned about in High School has turned in the buyer’s favor, for the first time in many years. What that means to you is that the time may be right for you to buy that primary home or second home that you have been unable or unwilling to buy over the last few years.

If you are ready to buy, we can help. Click here to learn more about our Buyer Services or give us a call at 866-359-8289.

New Hampshire Brokerage Services