Social media – Why is it a Risk in Business Sales?

social media risk - Assynt

Is Social Media a risk in a business sale?

We all know something about Social Media but what are the risks of social media for business when it is sold?

Due diligence by a buyer starts as soon as it knows the name of the seller. A buyer will seek to limit his risk and will want the process to be as hassle-free as possible.

Due diligence is like kicking the tyres. But we are not talking about buying a car, here. The similarity stops there. Social media is now an area a buyer will be reviewing because a poor social media policy could:

  • Risk the reputation of the business and goodwill affected
  • Breach of regulations and penalties charged
  • An inappropriate leak of the business sale before it is completed.Theft of Data

So what are some of the risk areas?

Theft of Data

There have been several examples of popular Facebook pages and Twitter profiles being “lost” when an employee leaves or worse “stolen” when an employee is poached by a competitor. A page with many fans provides a valuable contact data list.

Audit trails

Posts may be made from unidentified sources. A great danger. To avoid this happening, passwords must not be shared and the trail robust enough to pinpoint who or where the post came from.

UK Data Compliance

If data is stored overseas, then there could be a breach of UK data storage policy and UK law.

Defamation and the Law

Posting, tweeting or re-tweeting a libellous message may leave the person or organisation involved open to prosecution.

Reputational Risk and response Times

If mistakes happen and they do, a business needs to respond quickly.

This requires investment into social media management tools especially when the error may have occurred overnight.

Even if you are not in the process of considering a business sale and do not have an exit plan this is still an area you should consider.

It is not one I would claim to know much about, but I do know someone who does.

So, if you are concerned then please contact me, Andrew Watkin on 07860 898452, or by email:


More reading, help and advice from Assynt Corporate Finance

Below you'll find links to other articles that offer help and advice about selling your business, what to look for, considerations and recommendations.

If you would like further help, contact us, we'd be only to happy to discuss your sale and can help if we can.

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