We get it. When you have employees, it can be hard to see them as just employees. They’re trusted colleagues who may have been working with you for a long time.

When it’s time to list your business for sale, it can be tempting to keep everyone in the loop. They should know that the business is potentially changing hands in the near future, right?

Unfortunately, no. Here’s why:

No one likes change. Particularly when that change could upset or derail someone’s paycheck or career plans. Employees who find out their place of employment is for sale invariably panic and a good number of them quit before a sale even happens. Think an entire kitchen staff including the head chef leaving en masse. Or an entire salon staff walking out and taking their regular clientele with them.

A huge staffing issue like this, at a time when prospective buyers will be scrutinizing your business and it’s sustainability will obviously kill any potential deals. It can cause massive issues for your bottom line and has tanked businesses completely before they got anywhere near a closing table.

Don’t do this to yourself, your business and your chances of successfully reaching a closing table. You have to keep your employees in the dark about the for-sale status of the business until after closing. 

What about someone pivotal to the business, like a head chef or manager? Can’t I tell them what’s happening?

It depends. There are some instances where a key employee can be in the loop, but for the most part you need to keep anyone who is on your payroll out of the business transaction itself. We realize that it can feel like you’re deceiving the people who trust you – but what you’re actually doing is protecting the integrity of the place where they work. Keeping the business in good standing will keep them employed, and employees who are good at their jobs have little to worry about if they continue to be good employees under new ownership. No one wants to take over a successful business and toss out the people who make that business successful.

Talk to your business broker about the employees you have, the roles they play and whether or not you’d like some of them to know about the sale before it happens. Your broker will be able to help you decide if it’s worth the risk to your business to let some of your staff know what’s going on. In almost all cases, the answer will likely be that it’s better if no one knows.

Have you considered selling your business but are concerned about the future of your employees after a sale? Do you have questions about what types of employees should be kept in the loop? Feel free to leave any questions or comments and we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
5111 Ocean Boulevard, Suite E
Siesta Key, FL 34242

www.InfinityBusinessBrokers.com