Selling your business can be an exciting time because you may be moving onto bigger and better things in your life, but it may also be stressful because it involves juggling a lot of different factors.
One of these factors is whether or not to tell your employees, customers and key clients that you are selling the business. Obviously, everyone will know at some point or another, but should you tell them before the deal is completed?
Cons of telling employees and customers you are selling
Some business owners become so attached to their employees and even their customers or clients that the very thought of keeping this sort of secret from them ties them in knots. So what can happen if you tell your employees and customers that the business is for sale?
Employees can worry about their future employment with the new owners, becoming stressed about what might happen to their jobs, productivity can drop, employees and key staff can start looking for other jobs and even leave before the sale is finalised. The loss of employees prior to a sale can be difficult because it might look as if the ‘ship is sinking’ to any potential buyer, but the loss of key staff can be devastating.
Not telling key clients can also be a big problem, as they may feel that they have been betrayed and lose confidence in your business. Losing these key clients can actually make the sale fall apart, so informing them early, reassuring them and addressing any concerns they may have with the change in ownership, might be advisable sooner rather than later.
Informing your broad customer base of the impending sale, may lose you a few customers, but if you have a strong brand with a lot of goodwill and you handle the communications appropriately, you can often leave telling them until the sale is finalised.
Pros of telling employees and customers you are selling
Telling your employees, key clients and broad customer base that the business is for sale gives everyone time to acclimatise to the idea and can even expose your business to an unexpected pool of buyers. Customers, clients and key employees may all be interested in buying your business, so informing them early in the selling process can actually be beneficial in the long run.
As a business owner, you have the opportunity to explain clearly to everyone why you are selling, instead of letting the rumour mill create havoc and uncertainty amongst your employees and clients. You can also encourage key staff to remain with the business, as their intimate knowledge of your business will be a big benefit to the sale, and the new owners.
Also, when you inform key clients that you are selling and you do so early in the process, you avoid them hearing about the sale from your competitors or their own network within the industry. Communicating the important facts about the sale to your key clients and being confident about the transition is vital for their continuing patronage and the success of the business when it is sold.
It’s important to reassure key clients that they will still receive the same quality of service with the new owners and that the business isn’t being sold because it’s not viable, it’s being sold because you are moving on with your life.
In the end, whether you inform your employees, clients and customers of the sale early in the process or only when the sale is complete, is a very personal decision. Clear communication however, is paramount and can result in a smooth transition of ownership and the ongoing success of the business.
If you are interested in selling your business, why not book a consultation with the leading Business Broker on the Sunshine Coast? You can also download our Sellers Toolkit and find out everything you need to know about successfully selling your business