How to Handle Employees When Selling Your Business

As a business owner, selling your business is usually cause a celebration, or at a giant sigh of relief. But your employees, the picture is quite different.

At its best, imagining life after the sale is a murky nightmare most employees. What’s , without proper planning and action, their nightmare can quickly become yours. Follow these six tips to the transition smooth for everyone:

Keep it quiet: The single important thing to tell employees a pending transaction is … nothing. You might think that your open-door, open-book corporate culture demands full disclosure, but don’t it. Sale and merger transactions are far volatile. Discussing anything than a done deal will simply set alarm bells for employees, and many of will head to the exit. You have enough issues to deal ; employees defecting at the minute will not only distract you the task hand but will likely scare a buyer, too.

Make them commit: A buyer will often require a few key employees commit to staying the new company for a of time. In this case, keep the number of required people as small possible, and then bring them the discussion individually. As you discuss an employment contract them, paint a picture of the future and be sure that there is a nice financial incentive (bonus) paid them for both signing fulfilling the contract. Also, impress on them the need silence about this deal until the official announcement is made.

Remember the little guy: While are certainly no rules about compensating every employee when you your exit, remember that business is built by one person. Sharing the wealth will not only help you sleep better night, it will make things a whole lot easier if you have to come back into the company, or if you ever want to hire those people your next venture.

Negotiate everything: If the sale contract rewards you continued strong financial performance, sure your team will transition intact and task. After a sale, however, a buyer is often interested slashing costs, which can mean cutting salaries or staff. Plan advance to trim unnecessary headcount before sale, and make sure that remaining staff is well cared for your agreement. Sale contracts can stipulate anything you want, staffing levels, salaries, and bonuses for those you’re leaving .

Don’t go: One of the best ways to keep your team happy and place is to set a personal example. Selling your company does not have to be the of the line for you. Plan a six-month transition period after the sale which there is little change. Be sure your people know you are still control of the day-to-day operations and that their jobs are safe. When you do step , do it quickly and decisively. Rumors and uncertainty are the enemy.

Pile on the love: If you have avoided strong gestures of employee appreciation, it may time to change course. Prior a sale, the occasional team-building or off-site rally can keep things light and positive. Informal get-togethers are great places to listen rumors and to squash the scuttlebutt that can infect employee morale. Don’t let your preoccupation with the sale blind you to the troops are saying.

In the , every company ever sold has lost some employees. Some will go mad, some will be fired, and some will take it a personal insult. That’s life. As the business owner, your job is to try to make every single person happy but to acknowledge the efforts that so many have made.


Adapted from: allbusiness.com, January 5, 2012.