How To Break the News to Staff That You Intend to Sell a Business

How to Tell Staff you Intend to Sell a Business

If you own a small business, your staff can feel like family. Their opinions could impact your decision to sell. 

So how do you tell them you're selling? And when’s the right time to do it?

Managing your team through the business sale is an important part of the process. You want to get the best possible price, but you also feel a sense of responsibility to your employees.

These are the people who’ve helped build your business. So how do you break the news without causing panic, gossip, or a walk-out?

 

Timing Is Everything

 

One of the biggest decisions you'll face is when to tell your staff.

Too early, and you risk creating uncertainty. Too late, and they may feel blindsided.

The last thing you want is your team jumping ship and looking for new jobs. Losing key staff right before a sale can seriously impact your business sale. Buyers want stability and staff turnover can be a red flag.

So, when’s the right time?

There’s no one-size-fits-all answer. It depends on your business type and size. A cafe will manage this very differently to a manufacturing company.

In the best case scenario, not telling staff keeps things steady for the buyer. This is important in the sales process as it can take months to actually sell the business, so you need the sales to keep rolling in and the business to be operating at its maximum level. You dont want to scare away buyers with a drop in profitablity. 

You can build in strategies that make the staff feel secure and valued post-sale. Remember, you dont have to tell your staff. It is your business, and you need to do everything to protect the asset and get the most value at sale time. 

That said, if your reason for selling is obvious, like retirement or you suspect word might get out, being open can actually help. Staff can support the transition, help systemise processes, and become key players in making the sale successful.

Like I said, there no "perfect time" to tell your staff as every business is different. This is why you should get advice from these types of advisors when selling your business. 

 

 

Be Honest, But Strategic

 

When it’s time to talk, be open but professional.

In small business staff can feel like your family, but it is business. 

Let your staff know the decision hasn’t come lightly. Share your reasons (retirement, new venture, health, etc.) and reassure them that your priority is a smooth transition that benefits everyone. 

If you are telling them after you have found a buyer, this is a good way to share the information. Talk about who the buyer is and when the transition is expected to happen and if you will be staying on for the training and transition period. 

 

Reassure Their Jobs (If You Can)

 

One of the first things staff will worry about is their job security.

If you expect the buyer to retain staff, say so. If not, be clear on what support will be provided, whether it’s payouts, references, or helping them find new roles.

Uncertainty creates anxiety, so the more information you can share (without breaching confidentiality), the better.

 

Manage the Gossip

 

In a close-knit team, news travels fast, and not always accurately.

It’s better to call a team meeting and give people the facts rather than let rumours swirl. After the meeting, be available for 1:1 chats so employees can ask questions privately.

 

Protect the Business During the Transition

 

You still need your business to run well during the sale process, so keeping morale steady is important.

A transparent, respectful approach can help staff stay motivated and confident in the business. Highlight what’s staying the same: their roles, day-to-day operations, and how clients are still your priority.

A buyer will be doing a thorough due diligence when they are buying your business, so keeping staff on track is important. 

 

Get Everything Ready

 

When selling, make sure all your employment contracts are current and up to date, do a review with your team in advance. Ensure you’ve completed quarterly performance reviews and paid all superannuation entitlements.

If your team has built up a lot of unused leave, encourage them to take time off. Buyers don’t want the risk of staff quitting and expecting big leave pay-outs after settlement.

Tidy up the basics; contracts, leave balances, and super. It shows your business is well-managed and reduces risk for the buyer.

Selling your business isn’t just a financial or strategic move, it’s a personal one, and how you handle it can leave a lasting impression. Going through this process may also help you decide if you want to offer a buyout or vendor finance option to help the buyer transition. 

Break the news with honesty, empathy, and a plan, and your team will likely respect your decision, even if it catches them off guard.

If you’re considering selling, check out our guide to selling a business in Australia to help plan your next steps.

Tags: selling a business employment hr

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