When you sell your business you have a lot to think about including whether or not to tell the employees of a potential sale. There are two ways to think about selling your business regarding the employees. We will look at both situations to help you make the right decision regarding your business.

As the seller it is impossible to guarantee employees will get to keep their jobs. A buyer can come in and disregard any recommendations you have about your staff. On the other hand if the buyer wants their business to remain effective they may listen to your recommendations and keep the important staff members. With a potential sale there is always a worry that someone could lose their job.

Most sellers of a business will not tell their employees about a sale of a business until it becomes a serious possibility. In other words, the seller will keep the sale quiet or even the idea of a potential sale quiet until a buyer is close to signing the paperwork. At this point a seller should be respectful in telling their employees they are selling the business. You may offer your reasons for the sale, and try to assuage their fears. However, you do not want to make promises that you cannot keep or that the new buyer has not made. In this conversation it is best to tell the employees only what you know, and what has been discussed in a limited capacity.

By waiting until you have a potential buyer and one that is almost ready to make the deal happen you will keep your good employees on hand. It also means morale is in a good place with your employees. However, you do not want to leave them without a job either. There are things you can do with the buyer to help this process. Ask the buyer if they have an idea of which employees they will keep. You may even request a clause in the contract for the sale, which states all employees must be given a month’s notice to find a new job.

The second method some sellers use is to alert certain employees of the potential sale. The seller does this because they may feel the employee or group of employees might be interested in buying the business. For example a manager who has been groomed to run the business may have made it clear they wanted to eventually own their own place. You can give them this opportunity by asking them to remain silent about your proposed sale. It also allows them to have a right to decline.

They may not have the funds or the desire to buy your business. If that is the case you have respected them enough to ask, which will make them feel good and respected. You must choose your own methods for telling the employees, but you also do not want to jeopardize a sale by alerting the employees too early about a sale.