The truth is that the sale of your business to the right buyer should be good news for your staff. The buyer will have more resources than you, as a private shareholder, will ever have. This means greater investment, faster growth, new employment, and promotion opportunities. The best buyer will be planning to increase the resource demands that the business has.
So, when to tell staff about a sale? This doesn’t come with a straight-forward answer. There is rarely a ‘right’ time to tell your staff, but there is an argument to be made for doing it earlier than you might think. There are many reasons for this, including:
Making staff feel included: many business owners worry that mentioning a sale could unsettle staff. In reality though, taking them into your confidence and highlighting the sale as about securing the future growth potential of the business, could boost morale, and make them feel part of the decision process. Waiting to tell them until the very late stages can shock your team, which in turn creates uncertainty for a buyer, potentially collapsing the deal.
Buy-in from key staff members: if you are no longer active in your business, or have key members of staff that effectively run the company for you, it is a good idea to bring them into the sale process. A potential buyer will benefit and gain assurance from meeting the team members that drive the business forwards. Giving a buyer confidence that the business is in the right hands, may even positively affect an offer value.
How early is early?
We tend to recommend that a good time to bring the staff into your confidence is once key prospects have been identified, interest indicated, and first meetings have been booked. Bringing in at the least the key or senior staff members at this point is likely to strengthen a seller’s hand, for the reasons mentioned above.
Luke Rebbettes, one of our deal negotiators and Kingsbrook Director, has this advice: “it can only be a good thing to bring your trusted staff into the process at meeting stage. They will feel like their opinions matter, and a buyer will have assurance that the team integral to taking the company forwards are willing and eager to engage with them post-sale.”
How do I tell my staff?
Ultimately, of course, it is your decision on when to tell your staff. Whatever you decide, here are a few tips to make it a positive experience:
1. Highlight that you are looking for investment to help the company grow and continue its success, to ensure that it has a long and bright future.
2. Mention that you have a range of interested parties that you feel are right for the business, but would love to get their input and opinions.
3. Stress that in the event of a sale you won’t be leaving right away, and will be there to smooth the transition.
4. Above all highlight the new career opportunities and benefits that will be available to them as part of a larger or new business structure.
Finding the right buyer
Kingsbrook invests heavily in its research capabilities. Our research team is dedicated to finding a choice of strategically motivated and financially strong trade acquirers for our clients’ businesses. These types of buyers almost always represent the best possible homes for a company’s staff. Of course, we speak to Private Equity buyers and known investors as well, but in our experience the best buyer is often not looking to buy until we approach them.
If you are thinking of selling your business and would like to explore your options with Kingsbrook, please get in touch, either by email at [email protected] or call us at 01635 736741.