Staff are a core component to the success of many companies. When you decide to sell a business, figuring out how to inform your employees and break the news of the impending sale can be a difficult conversation.
Depending on the size of your company, you may have a couple of causal staff or a large workforce with multiple team members. How you deal with this change and expose to your staff that you intend to sell the business, will be different.
Have Systems in Place to Sell a Business
Employees may expect the sale or they may take it as a total surprise. Depending on how involved you are as a owner in the day-to-day operations of the company, you need to make sure there are systems in place so the staff can continue to offer exceptional service after you sell a business.
Are you still heavily involved in the company? Your first role is to start stepping back, map out what you complete on a daily basis, start allocating it to a team member, or create training materials for the new owner. You want to know that once the company is sold that the new owners can continue to operate successfully. When you go through the handover process you need to ensure it is as smooth as possible.
It could be time to check what roles each team member actually has and outline clearly where their responsibilities lie. Having a clear employee chart and management system will make the transition easier. Check on each employee, are they having any struggles? Could they have more responsibility? Do they need more training? Are there areas that need more focus? Are there gaps that need addressing?
Conduct Employee Performance Reviews
A good way to start the conversation is to have performance reviews with your staff. Depending on the size of your operation you may have 360-degree reviews or one-on-one with management. In these reviews, you can get a sense of how your employee is feeling, their happiness at the company, their future goals and any training they may require.
You could look to introduce some training courses before you sell a business around topics such as; How to handle change, dealing with management, coping with stress in the workforce or related courses that you feel may assist employees in the changeover.
Check your Employee Contracts and Leave Entitlements
When its time to sell a business the amount of leave owing to employees may affect a buyers willingness to buy a business. Its important you encourage all staff to take their leave so that it is not seen as a liability to the new buyers.
You may have casual, part time or full time staff with different awards, wages and entitlements. Check every employee’s contract is up to date and correct. You will also want to ensure that all super payments have been made.
Consider your Staffs Reaction
Whether your enterprise has 2 or 200 employees the process of telling the team it’s time to sell a business will be different. The smaller the team, the more personal the message may need to be.
In smaller organisations, there is often more emotion invested and closer relationships between the staff. It is possible that a new owner may come in and change the current structure, employ different people or change how things operate. It is important your staff are prepared and willing to work with the new owner, as they have with you. As mentioned previously, look at providing some training that can help your employees deal with the change when you do sell the business.
In large companies, there should be a HR department well versed in employee matters. When there is a change in ownership in a company, staff are generally not told until the sale has been finalised and it may have very little impact on the staff’s day-to-day role within the company.
Its well worth looking into EAPs and how to embrace the uncertainty and change within your organisation.
Confidentiality is Important When you Sell a Business
Often businesses for sale are listed with a number of elements kept confidential to enhance the buying and selling process. The current owners may not want the information to be obtained by competitors, staff, suppliers, family members and so on so not all information will be available until the due diligence process.
By informing your staff that you intend to sell a business you are opening up opportunities for rumours and conversations amongst your team and within the community. This may affect the final sale price of your company. Depending on the type and size of your operation this may be beneficial or it could be a hindrance when you sell a business.
If you want to sell a business you can decide if you want to inform your staff when you’re preparing it for sale, or you can wait until a buyer has been found and contracts signed.