I am selling a metal hunting stand business. A potential buyer has asked for the CAD designs to be able to determine production cost per unit with a manufacturer. How can I share the designs with someone who has not purchased the company yet and make sure that they are not just used by them to manufacture it? I figured asking those knowledgeable in CAD design would give me a good answer. Thank you. Jason
"Make sure"? Short answer? You can't. Once he has those files he can do anything he wants with them.
Longer answer - you could try a contractual agreement like an NDA (Non-Disclosure Agreement). But they are only as good as his honesty and your lawyer.
Another option he has - He could BUY an actual product from you and take it to the manufacturer for an estimate too. But since his manufacturer is most likely in China (Grrrrr!!!) that is a little more difficult than just emailing drawings.
Your drawings are your most valuable asset. Share them at your peril.
"How can CAD designs be shared during potential sale of company?"
Sharing intellectual data before an agreement on sale terms is not a good idea.
I get offers for this website about once a month - generally, they want to know the financial details end tell me this site is worthless. What I do is first establish that they can in fact do a deal - show me a financial statement - which they always say no to - which indicates to me that they are just fishing.
The following is what I recommend and expect if I where to sell out this website.
1) Prove you can do the deal or at least that you likely have my target price available.
2) I would recommend that you already have a deal/contract to sell in place where they have a out if the expectations of costing etc. don't meet their contractual expectations. You should be able to provide estimated cost to build etc. - they could verify that data after the deal is made then move forward.
3) Escrow - make sure the money is there should they attempt to grab and run.
4) Be professional but know that there are crooks out there.
There's more to doing deals then the above but know that taking your time and thinking thru the offers and counter offers is important.
Don't let anybody rush you not let emotions get the best of you.
Thank you for your replies and suggestions. I had the feeling that by sharing CAD designs that the product could be made by someone else.
One thing about this is I purchased the company from someone who produced the units in his shop so cost per unit by a manufacturer would be different than what he produced it for. I do have one of his working units but I don't know what the cost per unit it would be to manufacture. That is where bringing the CAD designs to a manufacturer would be beneficial. I can understand a buyer of the company wanting to know cost per unit, but I also know that any designs I share could be used against me.
[B]WILL[/B] be used against you.
"but I don't know what the cost per unit it would be to manufacture."
You should then get (3?) quotes for the different parts and assembly in various quantities.
That would be your reference for selling and pricing the business and product....