I’m Selling my Business – When do I tell the staff?

Great question! Many owners find this issue challenging!

Selling your business is a big decision, and it often raises questions about how to communicate the sale to your team. One of the most common concerns business owners face is whether or not to inform staff about the sale before it happens. While you may want to protect your employees from uncertainty, keeping them in the dark could have negative consequences.

In this post, we’ll explore the pros and cons of telling your staff about the sale of your business, and why open communication can help ease the transition.

Why You Should Tell Your Staff About the Sale

1. Transparency = Trust Your team is a critical part of the business’s success, and they deserve transparency. By keeping your staff in the loop, you can build trust and foster a positive atmosphere during what could be a stressful time. When employees feel informed, they’re less likely to become anxious about the future of their roles.
2. Prevent Rumours & Speculation-Focus on the facts If your staff aren’t informed about the sale, they may start speculating about what’s going on. Rumours can spread quickly and cause unnecessary worry. By communicating with your team, you can prevent misunderstandings and rumours that could affect morale and productivity.
3. Help With the Transition Selling your business means changes, and your team will need time to adjust. By telling your staff early, you provide them with an opportunity to prepare for the transition. This also allows them to ask questions and get clarification on their roles, the future of the business, and any potential changes.
4. Retain Key Staff Members The news of a sale may cause some employees to feel uncertain about their future. Being open with your team can reassure them and reduce the risk of losing key employees who may be concerned about their job security. If you’re planning to stay on during the transition or help with the handover, explaining this can ease their worries.

When and How to Tell Your Staff

The timing and way in which you communicate the sale are just as important as whether you choose to tell them at all. Here are a few tips for handling the conversation:

1. Timing Is Key It’s crucial to tell your staff at the right time. You don’t want to inform them too early before the deal is finalised, as this could create unnecessary anxiety. On the other hand, waiting too long can lead to a sense of betrayal or mistrust. Typically owners are taking one of a few approaches to notifying their staff, upfront prior to the sale process starting, close to finalising a sale or when the sale goes unconditional. Ultimately it is based on what the owner feels comfortable with.
2. Be Honest and Clear When you talk to your staff, be clear and honest about the situation. You don’t need to go into every detail of the sale, but it’s important to provide enough information so they understand what’s happening. Let them know who the new owner is, what changes they can expect, and how the transition will affect them. Remember to convey that there is a level of anxiety for your staff, yourself and just as much for the new owner who has paid a lot of money to buy the business.
3. Provide Opportunities for Questions The sale of a business is a big change, and your staff will likely have questions. Give them the opportunity to ask these questions, whether in a group setting or one-on-one. Be patient and provide clear answers to help alleviate concerns.
4. Offer Reassurance Reassure your team that their roles are secure, or explain any changes that may affect them. If you’re staying on to help with the transition, let them know that you’ll be there to guide them through the process. This will help maintain stability and keep the team motivated.

The Risks of Not Telling Your Staff

1. Decreased Morale Employees can feel demoralised if they find out about the sale through rumours or after the fact. This lack of communication can create a feeling of disconnect and make employees feel unvalued. A decline in morale can affect performance and productivity.
2. Uncertainty and Anxiety Keeping your staff in the dark can lead to anxiety about their job security. Fear of the unknown can cause employees to leave voluntarily or become disengaged. It’s always a better approach to provide clarity and stability during the transition.
3. Impact on the Sale Process If your staff is not prepared for the changes, they might resist the new owners, making the transition more difficult. Employee cooperation and understanding are crucial for a smooth handover and for maintaining the goodwill of your business during the transition.

How New Zealand Business Brokers Can Help You

At New Zealand Business Brokers, we understand the complexities of selling a business and the importance of a smooth transition. Our expert team can help you navigate the sale process while ensuring you handle staff communication effectively.

We can offer:

• Guidance on managing staff communication during the sale process.
• Advice on preparing for a smooth transition and retaining key employees.
• Professional support to ensure that your business sale is a success.

Whether you’re ready to sell or just starting to consider it, we’re here to help you every step of the way.