Much of a business’s profitability comes from the contributions of its employees. In fact, usually client relationships are with the individual employee rather than with the owner, the brand or the firm. As a consequence, it is important to remember that the business would not be worth the asking price if the staff were not part of the package.
Unfortunately, when employees become aware that the business is being sold, they may, quite naturally, worry about their future with the firm, even if the new owner is not planning on making changes. Gary Stoetzer
Gary Stoetzer is a fellow broker with Sunbelt of Miami Valley. His post is a good summary of the change management a new owner should apply once the keys to the business are in their hands. One of the very first goals of a new owner is to get acquainted with existing staff and consultants—their individual needs, strengths and preferences—and to ensure that their goals mesh with where the owner wants to take the business. I talk about this in "You purchased the business, now what?"
In our dealings, though, we take precautions not to alert staff to the sale until all conditions of the sale are met. There are exceptions: occasionally an in-house accountant or other key staff members are necessary to a close and need to be brought into the seller’s confidence. But they must understand the need for confidentiality. Otherwise, employees will have questions the seller won't be able to answer. And the insecurity may cause them to look elsewhere for a job.
As business buyers count on taking over a business with skilled staff, losing key employees could affect the sale of the business. That's why we advise sellers to tell their employees only when the deal is done.
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