I came across a listing on BizQuest that I'm pretty sure is for a competitor of mine. If so, I would be interested in making an offer. But I am afraid that he is not going to want to divulge any details of his business to us for competitive reasons, or maybe won't talk to us at all or even admit that he is for sale. How can we work around this hurdle? I am seriously interested in buying the business, but I understand his concern about divulging any details to a competitor.
The most important thing is that you want to do everything above board here and not mislead anyone.
First let me ask you if the business is listed by a business broker? If so, you will be required to complete a non disclosure agreement on the business, and often these agreements contain a provision that you do not represent a competitor. The same holds true if it is a business being sold directly by the owner. In any case, whether a FSBO, or through an intermediary, I would suggest that you have your attorney call him/her and simply tell them that they have a client (you) who has seen one of their listings, you think it may be one of your competitors, you are very interested but you don't want to put anyone in a difficult position and you need to know how to proceed.
There may be a bit of wrangling that can go on between attorneys until all parties are comfortable but companies buy out their competitors all the time so this is nothing new. The main concern the owner will have is in providing confidential information to you. However, you should be willing to sign a rigid confidentiality agreement that goes so far as to detail the competitive nature of your relationship and possibly even a clear remedy for any breach.
I am not certain what your relationship is with the seller; however, if you act honorably, and your intentions are sincere, then it is simply a matter of conveying this directly to the seller. If he/she is really motivated to sell the business, a trustworthy understanding will be reached quickly.
|Get more expert advice in Richard Parker's How To Buy A Good Business At A Great Price - the most widely
used reference resource and strategy guide for buying a business.
|Richard Parker is the author of: How To Buy A Good Business At A Great Price, the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation - The Business Buyer Resource Center.|