How to Sell a Business Privately & Discreetly Without Employees Knowing
When you’re ready to exit your business and put it up for sale, should you let your employees know?
Some say it’s the courteous thing to do. Many business owners are inclined to let their staff know when major changes are happening within the organization, and selling the business is one of the biggest.
On the other hand, it’s wise not to tell your employees until after the sale. That’s because confidentiality is a very important factor in the process. In order not to undermine your exit plans, you must learn how to sell a business without anyone knowing.
Which route should you choose? Read on to learn more. Ultimately, it’s best to work with a broker who can advise you on issues of privacy and security when it comes to the sale of your business.
Why Should You Sell A Business Without Staff Knowing?
If your employees find out you’re selling the business well ahead of time, it can cause numerous problems for you as the owner.
For one, some staff members might lose morale, causing them to perform poorly. In turn, this can damage your company’s operations. Your sales can suffer and your exit strategy as a whole can be compromised.
Another reason to sell a business without staff knowing? Many may fear they’ll get paid less, work under worse conditions, or simply be replaced by a new owner. In such a case, employees might quit en masse or without sufficient notice.
According to Joblist, up to 73% of employees are willing to quit their job at any given time, for as simple a reason as a better offer coming around. Right up until your business changes hands at the top, make sure your staff feels you’re the one employer worth sticking with — and refrain from hinting there will be a change in leadership.
In other cases, employees might actively sabotage the sale, or jeopardize it unknowingly by spreading the news. This could get around to competitors, which is especially harmful when you’re engaging with possible buyers.
It’s hard to manage confidentiality issues like these alone. A qualified, experienced broker can advise you on keeping crucial exit planning information between just you, eligible buyers, and professional third parties such as lawyers, insurers, and accountants.
Informing Employees At The Point of Sale
The right time to tell your employees about the sale is when the deal is done. The closing process should be just a few days from completion, if not fully complete. By waiting until that time, you’ll head off all the issues mentioned before.
One academic study suggests that up to 33% of acquired workers leave within the first year of their startup being purchased. Right before closing, the buyer may insist on meeting with key personnel to ensure they’ll stay on the job. If this happens, be sure to impress upon everyone involved that the conversations must remain confidential.
The same applies if you need the assistance of one of your staff members — whether they’re a senior company leader or a team member with specialized knowledge — in closing the deal. It’s still important to keep discussions limited to necessary items and to have your employee keep all matters private until after the sale.
Talking To Staff After The Sale
The best way is to call a meeting between your staff and the new owner. It's an opportunity for the staff and new ownership to get to know one another, and for you to allay any fears of layoffs or big workplace policy adjustments.
It’s helpful to coordinate the messaging with the new owner ahead of time. To keep staff morale high, it is key to communicate that no sudden changes are on the horizon.
As another layer of reassurance for your employees, you can offer to stay around for a period of time after the sale of the business is complete. While your role after the sale may mostly be to advise the new owner for the next few weeks or months, you can maintain goodwill with your former staff by being available to answer questions.
Work With Raincatcher To Sell Your Business Discreetly
When you’re looking to sell your business, communications with employees are a very sensitive matter. Even if you’re determined to sell your business privately and discreetly, there are numerous ways that information can leak out and compromise your exit plans.
That’s where Raincatcher comes in. Our certified brokers can help you every step of the way when it comes to maintaining confidentiality.
We can advise you on the best time to inform your employees about the sale of your business, and how to avoid any communication pitfalls along the way. To get started, contact Raincatcher for a free valuation of your business today.