You will need to inform your employees about the sale of the business. It may depend on a number of factors including your business type, the buyer you are looking for, and the relationship you have with employees.
The sale of a business is often a positive thing for everyone involved. The new owner might bring more financial stability and be more committed to the business’ growth. Many buyers care more about keeping employees than eliminating them.
People who have been involved in business transfers know that new owners often want to retain employees. The employees are a valuable asset that the new owner will rely on to keep the business running smoothly. However, the employees are new to this area, having never had to deal with a business being sold. Employees can perceive the situation as one of uncertainty or even betrayal.
It is common to limit information about the sale to as few people possible. The general public typically knows nothing about the small-business-for-sale marketplace because it happens below the radar. To prevent potential buyers, vendors, and employees from mistaking the business for something else and putting a sale at risk, strict confidentiality is essential.
When is the best time to tell your employees that you are selling the business?
It is difficult to decide when you should tell your employees about your plans to sell your business. Although confidentiality is a top priority, it can be difficult to inform employees about the sale.
It is normal for employees to feel negative when they hear that the business has been sold. They might look elsewhere for work, possibly with other competitors.
One option is to inform employees of a sale in advance to allay any fears and prevent them feeling betrayed. Many sellers feel a strong sense of obligation to their employees, particularly those who helped to build the business.
One seller wrote a thank you letter to his employees. He thanked them for their loyalty and explained that he was no longer able to manage the business. He explained that the continued success and growth of the company were dependent upon a new owner.
Another disclosure approach is to let just a few employees in advance such as the bookkeeper, manager or accountant who might need financial information or any other documentation required by a buyer. This approach can reduce employee dissatisfaction at not being trusted with information, and may limit the rumor mill becoming destructive to the company. It recognizes that sometimes it is impossible to keep the decision not to sell from just a few employees.
The prospect of selling your business can be daunting. Although change can be challenging, it doesn’t always have to be scary. Here are some suggestions to help you handle telling your staff that you are selling the business.
Preparing The Groundwork
Experts advise that you do not inform your staff about the sale until all details are finalized. There are several reasons why this is important:
- It is important to remember that staff can sabotage your business sale. You want to avoid any employee derailing the deal which could spook the buyer away.
- Delaying your announcement has the added benefit of giving you a window to prepare properly without interference from outside. This will allow everything to run smoothly when you make your disclosure.
- It is important to make sure you have a team that can manage the business. This will empower the people who are qualified to take on these responsibilities. It will also show potential buyers that the business can be managed without your involvement.
Maintaining Status Quo
It is important to ensure that your employees feel secure and comfortable throughout this process. Unnecessary alarm can be caused by disruptive events or signs of impending changes. Before you know it, rumors can spread quickly.
Keep your routines and work habits the same. You don’t want to tip off your staff that changes are afoot.
Although you won’t be able to guarantee anything to your employees when it’s time to disclose the sale, it will be easier from a staffing standpoint to find a buyer who is interested in maintaining the staff that you have.
Breaking The News
Although it can be disruptive, staff members will be much more comfortable accepting the news if you have done the necessary preparations. It is a good idea to announce the change of ownership as soon as practicable along with the buyers. This allows for transparency and shows that the new owners are vital to the business’ success.
This approach will send a message that you are also optimistic about the company’s future prospects to your employees. This can be used to establish rapport with key staff members and the workforce for future meetings.
This can be followed up by maintaining open communication after the announcement and being open and honest with all parties about any future changes.
You should also consider when and how you will announce the change to customers, business suppliers, and other stakeholders. If you can create an environment of trust that demonstrates how much your business values your staff, it can help to win their loyalty and respect during a critical time in your company’s past.
It’s never easy saying good bye to people that you care about, especially staff members who have supported your business over the years. Keeping this secret from them can be challenging as is worrying about what will happen after you leave. Yet, protecting the business through a confidential business sale is also protecting their interest in maintaining the business and their jobs so that all stake holders can enjoy a positive outcome.