What Happens to Your Employees After You Sell Your Business?
What’s one thing your business can’t function without? Your employees.
Long-time employees have seen your business grow and change, and they may even know more about your company than you do. But when it comes time to sell your business, many business owners don’t know where that will leave their trusted employees (who are often more like family). Does selling your business mean leaving employees high and dry?
Building a Work Family
Over the years, you’ve built a team that you can count on — and by now, you’ve formed a work family. You know each other’s kids, celebrate each other’s accomplishments, and rely on each other to get the job done.
“Our employees all came to us with various needs, and through meeting those needs, we created close business relationships and friendships with people who’ve stayed here for years.”
So naturally, selling your business could feel like turning your back on the people you’ve counted on to keep things afloat. If you’re holding back on selling because you’re unsure about what will happen to your longtime employees, we’re here to quiet your fears. Here’s what you can do to protect your employees as you navigate the sale of your business.
Create a Succession Plan
Well before you make the decision to sell, you should have a plan in place for how the company should proceed after you exit. A succession plan will guide your employees and family members in the event of an emergency, and it will also guide your employee relationships through a transition.
Many of your earliest employees have risen through the ranks and now occupy high-level management positions. As you draw up your succession plan, you can highlight these trusted employees to lead the company through any transition, including a sale. Providing your buyer with a list of key employees could prevent replacements and may even result in their promotion under new ownership.
Set Goals for Your Sale
There is much to gain from selling your business: more free time, a nice lump sum payment, or maybe a pared-back role. To get the most out of your deal, you need to set goals early on. In early conversations with your advisors, make sure they know what’s most important to you when it comes to deal terms.
One of those goals can be to secure your employees’ futures — whether that means ensuring that they stay on after the sale or receive a portion of the profits from the sale. Your advisors will know how to negotiate the best deal for you and your team, as long as you let them know that it’s a priority.
“My main goal was to find a buyer who would take good care of the employees, and I was pretty adamant about leaving things the way they are.”
Select A Buyer That Shares Your Values
As you’re wading through all of the potential buyers, it’s important to make sure that you choose a buyer who aligns with your values and shares your goals for the future of the business. Not only will it make for a more harmonious process, it will also increase the likelihood that your current employees retain their jobs.
As your business enters a new phase, you’ll be able to trust that new ownership will uphold the same standards of customer service and positive employee culture.
Stay On With Your Business
Many of our sellers aren’t looking to completely exit the business, but they’d still like to hand over some of the liability and responsibilities to new owners. In that case, you could continue to work in a managerial role or even a new position that allows you to still be involved — which will give you more leeway to keep your most trusted employees around.
“I stayed on and continued to work after we were acquired by ATI, and I did my best to invest in their culture, learn their systems, and get acquainted with our new resource partners and stakeholders.”
As your role shifts and changes happen within the company, you’ll see firsthand how your work family is being treated, and you’ll be there to advocate for them.
Trust the Process
The best thing you can do to secure a great future for yourself and your employees is to trust your advisors and trust the process. Selling your business can be an emotional rollercoaster, but at the end of the road, you’ll gain a newfound sense of freedom — both personally and financially.
When you first begin exploring an M&A deal, it might seem overwhelming. It helps to work with experts who can guide you through the whole deal, help you achieve your goals and protect your employees.
Find out more about the sale process in our Start Here Guide.