You should generally share detailed financial information once a potential buyer has demonstrated genuine interest, been appropriately qualified and signed a non-disclosure agreement (NDA). Initial discussions can begin with high-level figures, such as turnover and profitability. More sensitive documents should usually be provided progressively as the transaction advances towards due diligence.
Consider three stages of disclosure:
- Initial enquiries: Share general information about the business, including its sector, approximate turnover, asking price and broad financial performance.
- Qualified buyer discussions: Once the buyer's credibility has been assessed and an NDA signed, provide more detailed financial summaries and relevant supporting information.
- Formal due diligence: Share detailed accounts, tax records, management reports and other sensitive documents through an appropriately controlled process.
For example, you might initially disclose annual turnover and adjusted profitability, while reserving detailed customer revenue reports and bank statements for formal due diligence.
Before sharing information, consider whether documents contain personal data, commercially sensitive details or information that should be redacted.
Read more: How to Verify a Buyer Is Serious Before Sharing Your Financials
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