Confidentiality: When To Tell Your Employees You Sold

The Deal Board

Andy and Jessica welcome you to another episode of The Deal Board Podcast. This week, they discuss the complicated issue of confidentiality during the sales process and when to tell your employees that you’re selling the company. Most owners want to do right by their employees when they decide to sell, which is why they might feel compelled to be transparent and include their workers in the selling process. Today they get into why you are actually doing your employees a disservice if you tell them that you’re selling, the upheaval this can cause, and what you should do instead. They also share several war stories of sales that went awry after owners told their employees they were selling, including a drop in value that exceeded three million dollars. Don’t miss this essential conversation on confidentiality, transparency, and how to navigate the sales process! Listing of the Week:

Art Warsoff is selling a prominent full-service roofing business in Utah. The business is listed for $1,649,000 and the down payment is $1,484,000. Last year it earned over $600,000 in SDE, and we’re excited to see what next year will bring. The company has been established for over 40 years. Practically everyone in Utah has heard of them, which means the company has done some excellent branding. They also have a full team of people that can handle all sorts of services. For more information call Art at [phone] or email him at [e-mail]

Deal of the Week:

Pat Bass tells us how he took a 20-year-old pharmacy to market and successfully procured a qualified buyer. The buyer and seller had an instant connection; another wonderful example of brokers doing good deals for good people. The pharmacy was in a small Ohio town with a population of just over 1700 people. Regardless of the size of your business, or your town, if you’re a business owner and you’re considering selling, let us work for you. For more information call Pat at [phone] or email him at [e-mail]

Key Points From This Episode:

• [00:00] An overview of today’s topic: keeping your sale confidential from your employees.

• [01:37] Why confidentiality is important and what to do before the sale.

• [04:50] What to do during the sales process when you’re listed.

• [07:45] Four key things that can happen when you reveal to employees that you’re selling.

• [12:44] How a coaching business went from a three-and-a-half million valuation to selling for $220,000 after telling her leadership team about the sale.

• [14:47] The challenges of selling a family business, and the big risk one pair of owners took when they told their children about the sale.

• [17:52] What happened when the owner of a successful awning business told their primary employee they wanted to sell.

• [19:44] How and when to break the news to your employees that the sale is closed.

• [21:40] Listing of the Week: Art Warsoff (Utah county) is selling a prominent full-service roofing business in Utah. [23:14] Deal of the Week: Pat Bass (West Central Ohio) tells us about finding the perfect buyer for a beautiful small-town pharmacy in Ohio.

Links Mentioned in Today’s Episode:

The Deal Board Podcast

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The Deal Board on LinkedIn

The Deal Board on Facebook

United Franchise Group

Transworld Business Advisors

Transworld on LinkedIn

Transworld on Facebook

Call us on [phone]

Email us at [e-mail]

Exit Factor

Art Warsoff

Pat Bass

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Quotes:

“Early departure is probably the number one negative effect we see with revealing the sale process.” — @jessfialkovich [0:08:38]

“The employees are probably going to be revered by the new owner, be celebrated, maybe even get promotions and salary raises. Don't tell them now. It will lead to people leaving, and we've seen it [happen], unfortunately.” — @acags [0:08:49] “I don't know why it happens like this, but anybody that tells their employees before the sale causes major disruption. – [But] I have never seen a major disruption or a mass exodus once the deal has already been done.” — @acags [0:10:54]