How to Support Your Employees When Selling the Business

After years of working to turn your vision into a profitable venture, the day you sell your business should be celebrated. However, for those who helped you get there—your employees—it may not be a cause for celebration if you’ve neglected to prepare them for the transition. Every business sale is different, but it invariably puts loyal employees in the middle without any control over their livelihoods. That creates unnecessary stress for everyone, with the potential to scuttle the business sale.

Here are five things business owners can do to ensure the best possible outcome for themselves and their employees:

Keep it Under Your Hat

There’s no need to cause panic among employees until the deal is done. Rumors amid a lack of transparency can lead to a decline in productivity or employees jumping ship, either of which could scare off a potential buyer. The exception may be your key employees whose continued employment could be instrumental in getting full value for your business. It would be essential to bring them into the loop early to discuss their roles in the transition and the new business while swearing them to confidentiality.

Prep Your Business for the Sale

It’s common for a buyer to look at reducing costs after a sale, which often involves cutting staff or salaries. Plan ahead for the transition by trimming costs where possible. While that may mean reducing headcount, at least you will have time to assist those employees in finding new jobs. Find ways to increase efficiencies and productivity among your remaining staff, making them more attractive to potential buyers.

Negotiate Your Employees’ Futures

You can negotiate anything you want in a sales contract, including staffing levels and compensation for employees who stay with the business. While buyers are not required to keep any employees following the acquisition of a business, you can still negotiate on their behalf. You can obtain written guarantees that certain employees be retained for a minimum of 90 days or six months. That will give them time to look for new opportunities or prove themselves as essential to the buyer.

Help Transition Your Employees

It is sometimes inevitable that some jobs will be eliminated following a sale. Once the deal is announced, set up a job placement service in your business. Partner with an outplacement specialist or job coach to assist employees in their job search. Offer flexible work schedules to allow employees time for job interviews. Your goal is to help your employees while keeping things running smoothly during the transition.

Share the Wealth

There’s nothing written about compensating employees as you walk out the door. However, considering your employees were instrumental in getting you to this point, you should consider sharing a bit of the wealth from your business sale. It will create substantial goodwill among people who were important to you and with whom you may have relationships in the future.

Show Your Appreciation

Take time before the sale to let your employees know how much you appreciate them. Bring them together for office lunches and off-site events with their families to keep things light and positive. You’ll want to keep your ears open for rumors and any signs of discontent that could affect employee morale.

Sell on a High Note

The best time to sell a business is when it is on an upswing in sales and revenues. That’s also a way to demonstrate the value of your employees to potential buyers. Buyers recognize when employees are critical to a business’s success through their experience, industry knowledge, relationships with customers, and contributions to productivity. The goal is to be able to present your employees as critical business assets that can help the buyer continue the success of the business.

The bottom line is it is in your best interests to keep your employees’ best interests in mind when selling your business. Be transparent, supportive, and empathetic while advocating for their continued employment. By making them your central focus, you can ensure a smooth transition while increasing the value of the business.