When it comes to selling your business, there are so many areas that require delicate handling that it’s hard to know which one is the touchiest. Perhaps no other part of the process of selling causes more angst and discomfort than the thought of telling your employees that they’re going to be working for someone else.
When Chris and I sold our business, we assured the buyer that we thought all of the employees would stay on with a new owner. Behind closed doors, however, we had some doubts — three of them, to be exact. We had 14 employees at the time, and we identified three in particular that we thought might quit when they heard the news that we had sold. These employees had helped us build the business. They had been with us the longest, and were the most loyal and hard-working. We thought they might pack up their bags and leave once we had permanently left the building.
We were wrong.
There’s a lot of debate about how to tell your employees and when to tell your employees that you’ve sold your business. But amidst all the tiptoeing and debate, no one seems to mention that your employees may actually be happy that you’re selling the business and moving on. Here are three reasons why:
This may sound counter-intuitive, but there’s a funny paradox that occurs when you sell a business. Some employees fear that a new owner is going to come in and immediately fire people, while the buyer is typically afraid of the opposite — that everyone will quit. The reality is that both sides usually want the same thing. The employees want to keep their jobs, and the new owner wants everyone on the org chart of the business they bought to stay.
The first year after a sale can be somewhat of a safe period, when the buyer will be reluctant to make any big changes until they’ve got the lay of the land. Many employees pick up on the fact that the new boss has more reliance on them than you did, and this gives them a chance to prove all over again how indispensable they are to the operations of the business.
Opportunities for Career Advancement
Let’s just say it: employees aren’t stupid. They look up and down, and side to side within your business and know where the promotions are, and — more importantly — precisely where career opportunities end. If your business is being purchased by a larger organization, or a buyer that has plans for expansion, this opens up a whole new world of possibilities to your employees.
We recently worked on a deal where the buyer owned two other companies that sold two complimentary services to industries outside of the service and industry that the seller’s business was in. The buyer also had offices in four different states. Overnight the employees went from working at a small mom-and-pop operation to working at a growing, mid-sized company with plenty of future options for either promotions or lateral moves within the organization. Who wouldn’t welcome that kind of change?
New Growth, Energy and Ideas
We recently worked with a seller who was 72 years young. Despite her amazing abilities, she confessed she knew that the employees knew she wasn’t running the business on all cylinders. Sales efforts to bring in new customers had all but stopped, and the business had been perking along on its own steam for a couple of years. She knew the buyer would be bringing fresh ideas, fresh energy and the kind of opportunities for career advancement mentioned above. And she knew her employees would be excited about all of it.
A year after Chris and I sold our business exactly one of our old employees had quit, and that was because she decided to pursue a career in law enforcement. What we didn’t realize at the time was that we had done everything right. Our employees weren’t loyal to us, they were loyal to the business that we’d built: the brand, the reputation and values it represented, the quality of the product and service, the work environment and the customer base. Those were the things they loved most about their jobs, not me and my husband (although I appreciate the fact that they seemed to tolerate us well).
The issue of telling employees will always be a tricky one, and there are no hard and fast rules about how or when to do it — each situation is different. But as you agonize over breaking the news, consider for a moment that your employees may be as happy as you are that someone new will be taking the reins.
Author: Barbara Taylor
Barbara is co-founder of Allan Taylor & Co. and a former New York Times blogger. She has been a small-business owner since 2003. Barbara lives with her husband, Chris, and their two sons in Northwest Arkansas.