Selling a business can be complicated, and perhaps one of the trickiest parts of the process is announcing the sale to your team. For advice on how to share the news of a pending company sale to your staff, we asked members of the Young Entrepreneurs Council (YEC) the following question:
Q. What is the most important thing you should do before announcing to team members you plan to sell your business?
1. Have a transition plan
Be prepared with a transition plan that specifies the timing and how the employees will transition to a new owner. This will keep the transition smooth and keep your employees informed. —Serenity Gibbons, NAACP
2. Be sure that you’re actually selling
Certain topics can make it feel like the ground is moving under employees. When they hear that their employer is selling, they’ll first think about what that means for them. Will I still have a job? Will I get paid out? What happens to my friends? As a business owner, you must be certain that you’re going through with the sale, and shouldn’t “float” the idea. The team will be shaken, so speed and certainty are critical. —Aaron Schwartz, Passport
3. Create an open forum
First things first: You need to prepare and make sure you are available to create an open forum for your staff to understand what is going on and to get any questions they have answered. Take care of the people who brought you success, otherwise you may derail the motivation of your team and everyone in the company. —Nicole Munoz, Nicole Munoz Consulting
4. Don’t tell everyone at once
Before announcing to your entire team that you’re selling the business, tell your closest and highest ranking employees first. The employees who have been with you the longest and who have the most senior positions should be aware of your plans before the rest. These employees are key to the success of the business and telling them first will increase trust and make them feel a part of the process. —John Turner, SeedProd LLC
5. Address employee concerns
Before announcing that you plan to sell the business, it’s important to consider the questions employees might have and prepare responses accordingly. Team members will wonder what this means for their benefits and roles, and how customers will be impacted. By entering the conversation prepared to give concrete answers, you’ll alleviate unnecessary stress on your team. —Stephen Beach, Craft Impact Marketing
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6. Decide how to tell customers
When selling your business, you will have to announce the sale to team members, but you typically also will have to announce it to customers, too. So, create a plan for your team about how you will announce this change to your customers, when it will be announced, and how they should deal with customer questions. You don’t want your employees to tell customers before you’re ready or to give incorrect info, so make a plan first. —Stephanie Wells, Formidable Forms
7. Tell them why
Prepare for employee communications by writing an internal memo before you choose to break the news. Put fact sheets together about the deal, as well as any major talking points, so everyone involved knows why the sale is occurring and how it will impact them. Also, be prepared to make time to answer questions. —Blair Thomas, eMerchantBroker
8. Meet with those directly affected
Often times when businesses get sold, it’s not the entire business. If you’re only selling one part of your business while continuing to operate another part, you’ll want to have a separate meeting with those team members who will be directly affected by the sale. Let them know whether their position will stay intact with the new buyer or if you’ll be providing a relocation package. —Jared Atchison, WPForms
9. Prepare for the worst
Selling a business can be really stressful, especially when you are close to your employees on a personal level. However, a decision must be made based on business aspects, not on emotion. It’s important to remember that the employees are likely to quit. Be sure to discuss details with the buyer in regards to having replacements ready. Preparing for the worst is key. —Fritz Colcol, ABN Circle
10. Keep timing in mind
Be cautious when announcing to your team members your plans of selling the business. If you make the announcement too early you may lose a lot of valuable employees before the sale is closed. A mass exodus of employees can give a buyer pause and potentially prevent the deal from closing. —Matthew Podolsky, Florida Law Advisers, P.A.
RELATED: Selling Your Startup to a Large Corporation: Dilemma or Opportunity?
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