When someone is selling a business, it is usually assumed that this is going to be a touchy and delicate issue for existing employees. This is one of the primary reasons that reputable business brokers go to great lengths to ensure confidentiality during the sales process until the time is right to announce it to employees and customers.
It is understandable to believe that employees might pack up and leave when they find out that a new owner is coming in. It is human nature to be upset by major changes like these and the uncertainty it creates. And this is definitely the kind of news that you want to break to your employees personally, rather than having it leak out through a third-party source.
All that said, the reaction of your employees when you announce that you are selling the business may not be as drastic as you anticipate. If presented in the right way, you may be able to turn this into a positive and even encouraging conversation. To accomplish this, it is important to focus on the reasons why employees should embrace new ownership.
Here are three ways your employees may benefit from a new owner:
Enhanced Job Security: The first reaction some employees have when they hear that a new owner is coming in is to fear that they are going to fire all the employees. In reality, the new owner is usually afraid of the opposite – that all of the employees are going to quit. Although every circumstance is unique and some new owners have different ideas, in most situations, the new owner is going to be far more reliant on the existing employees than you are. For this reason, they are not likely to make any changes for the foreseeable future, and there is also a good chance that you will be able to discuss this with the incoming owner and confirm that this is the case.
Potential Opportunities for Advancement: Under new ownership, there may be career opportunities that were not available with you as owner. For example, if the business is being purchased by a medium to large-sized organization, your employees may suddenly have the ability to obtain promotions within the organization that did not previously exist. And since the new owner will be reliant on them in the beginning, employees begin with a clean slate and the chance to prove themselves by doing their part to keep the business running smoothly.
A New Owner brings a Fresh Perspective to the Business: If you are selling a business, chances are you are not as energetic about growing the business as you once were. In many instances, well-established businesses are successful largely because of the clientele or customer base they have built in the past, and the loyalty of their current patrons. Many business owners are aware of this, and it is often one of the reasons they decide to sell and move on to a new endeavor. A new owner, on the other hand, will have a fresh perspective and will bring new energy and ideas that your employees may embrace.
Considering Selling your Business? Speak with an Experienced Business Intermediary: Breaking the news to employees that you are selling a business is never easy, and there is no right or wrong time to have this conversation. Every situation is different, and you must use your best judgment to decide when to discuss new ownership with your employees.
The best way to help ensure that you are handling this situation correctly and successfully navigating other potential pitfalls in selling a business is to work with a reputable business broker. Business brokers are intermediaries who have access to a large database of potential buyers (many of them exclusive) and extensive knowledge of the selling process. They work closely with business owners to help guide the sale of their business to a successful conclusion.