How to Deal with Employees When Selling Your Business
Are you planning to sell your business? Lee Polevoi in his Intuit Small Business Blog discusses the two available options for you – to tell your employees or to keep quiet. You can disclose your plans and your reasons for selling to a few key employees. You do not have to bare everything going on regarding the sale. If you opt to keep quiet, the chances are you will be found out. This may cause apprehension and confusion among employees. The quality of your service may suffer consequently. There is also the possibility that your employees resign and you lose customers. There may be a flight to the competition. Such reactions may jeopardize the sale of your company.
Option 1: Keep people informed.
Revealing your plans to sell doesn’t mean you have to disclose everything about the process; the people who work for you don’t need a step-by-step description of what’s going on behind the scenes. Do explain the reasons behind your decision and what you aim to achieve with a successful sale. Manage employees’ expectations, too: Tell them you will provide more information when you’ve completed the transaction — and that, up to that point, they should disregard any rumors or gossip about a sale.
Do you plan to sell only to a buyer who commits to retaining your existing staff? If so, this information will certainly allay employees’ most immediate fears of dismissal. If this isn’t the case, you can emphasize that a consistently high level of performance will encourage the new owner to keep as much of the staff as possible.
If you aren’t comfortable telling the whole staff, you might also share your intentions with a select few of your most trusted employees.
Option 2: Keep things quiet.
News of a possible sale can spark confusion and anxiety (or even a mass desertion) among staffers, and recognizing this is a powerful argument for remaining silent until a sale is finalized. Considering the buyer’s need to secure financing, to ensure that all contingencies are covered, and to get escrow, leasing, and other arrangements in order, it’s often best to maintain a “business as usual” approach with employees.
Another compelling reason not to disclose: Employees with advance knowledge of a sale may tell customers about it. Apprehension about changes in the quality of your offering or customer service may trigger flight to the competition when you least want this to happen.
What if, despite your best efforts, word of a proposed sale gets out? It’s best to confront it head-on, because denials and cover-ups have a poor track record of success. Call a meeting to give employees the information they need; this isn’t a matter you should delegate to a subordinate or to convey in an impersonal email …
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