Selling Your Business: When and How to Tell Employees

 

Are you interested in selling your business? By now you’ve probably realised that it’s more than just the value of the business you have to consider. You’ve had hard working employees doing their best for you in recent years. You not only want to do what’s best for them, but you really owe it to them.

 

In many ways, you’re scared to break what you think is bad news. Selling a business means change, not just for you, but everyone. You want to give them the information of the sale at the right time and in the right way. You obviously want this process to go smoothly, and that requires a little bit of planning.

 

Figure Out What’s Going to Happen First

 

If you are tossing up the sale of the business and don’t have something set in stone, there is no need to start telling people. If you change your mind after telling employees, you risk your most talented employees jumping ship prematurely. Always wait until your decision is clear.

 

If the situation requires you to sell the business, regardless of the offer, provide the employees with an accurate timeline as soon as it becomes available. This gives employees enough time to figure out what they want to do with their future.

 

Let Them Know as Soon as You’re Sure What’s Happening

 

There will be many implications for the futures of the employees with the sale of a business. Unfortunately, the fate of the employees will be in the hands of the new owner. However, you are able to make negotiations in the contract of the sale. If you want as many employees staying put as possible, you can include a clause in the contract. How can you achieve this? First, get a valuation of your business. Then offer to take less money than the valuation in order to maintain the contracts of existing employees.  It’s best to stay in communication with employees and see if they want to stay.

 

When in discussion with the buyer, find out what they are intending on doing. If you are under the impression that most of the employees won’t be able to stay, give them a heads up.  A heads up will allow them to look for a new job.

 

Provide Them with the Support They’re Entitled To

 

Employees that are not able to stick around will need to find new employment. Do your due diligence and offer letters of recommendations or offer to be a reference where necessary.  Any stipulations in employee contracts that state what you will do in the event they are let go or the contract is terminated, it is your duty to ffulfillthose clauses.

 

They are able to use their accumulated vacation time and sick days until the official end date of their employment. Also, they might be entitled to some compensation, that will need to be paid out.

 

Selling your business will never be welcomed by your employees. However, it doesn’t have to be needlessly complicated. Always keep your lines of communication open to employees. Keep a very understanding attitude and things will go as smoothly as possible.

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Published on Aug 18, 2017

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