This article is an extract from Transmission Private’s monthly newsletter, The Lede, which tracks the world of reputation management for private clients. You can sign up for the newsletter on our website via the tab at the bottom of this article or by completing the form here.

Good morning. 👋 Welcome to this month’s edition of The Lede, themed on selling businesses. Entrepreneurs are cashing in. March saw the largest number of UK firms involved in M&A for 12 months, according to the ONS. 🎉 But many of these entrepreneurs are unsure what to say when they do actually sell their business... if anything at all.

Why is selling a business a reputation risk? If a business is highly identified with a founder, putting it up for sale will shock many stakeholders... and, sadly, invite harmful speculation. Is the business in difficulty? Can it survive without the founder? Is the founder in financial difficulty? And, most importantly, why are they selling now?

Isn’t this just harmless gossip? No. Research from Transmission Private — published later this month — shows that more than 4 in 10 people would assume that a business is in financial difficulty if an entrepreneur put it up for sale, or — more likely — if discussions about its potential sale were leaked to the press. This could damage the asset value of the business and, even, prompt financial stakeholders to pull credit lines to the entrepreneur.

How can shareholders manage the risk? Entrepreneurs need to get on the front foot and communicate the reasons behind a potential sale before it’s potentially leaked. This might be to retire, focus on family, crystallise their hard work, or focus on other businesses. Write the narrative before it writes itself.

How should this be communicated? Entrepreneurs should communicate with different stakeholders through different channels.

• Employees. Internal team members are the primary source for leaks. If a business sale is already on the rumour mill, ensure colleagues are kept up to date and understand the reasons for a potential sale. Leverage internal communications tools, such as newsletters and staff intranets portals, to manage messaging.

• Suppliers and partners. Write and distribute a release to the trade press to manage perceptions within your own industry. Stay one step ahead.

• Banks and financial partners. Write and distribute a stakeholder letter to keep all financial stakeholders in the loop; maintaining confidence throughout is critical.

Takeaway... selling a business is a moment of quiet celebration, but it comes with real reputational risks too. Entrepreneurs must get on the front foot to control the narrative. ✍️