When and how do I tell my Employees that I am selling my business?
There are always cases with special circumstances but the vast majority of the time it is best to wait until the sale is near closing. I want to make sure all purchase contingencies have been satisfied, financing is in place, all the money is in escrow, and the landlord has accepted my buyer and provided their signature on the lease assignment.
What are the reasons for waiting?
1. The main reason is that employees always tend to become insecure about their position with the company and the new owner. Am I still going to have a job after the business sales? Is the new owner going to replace me with someone else or a family member? Will I get along with the new owner?
All these questions come into the employees mind and more times than not, someone will quit on you and many times with no notice.
2. Another main concern is that the employees will tell your customers that you are selling your business while you are still in escrow. Customers come to your business because they like your product and or your service that you provide. They get concerned that they may not get the same level of product or service from a buyer they have not yet met. We all have competitors. Many of your customers will start using your competition. This can lead to your buyer noticing your business slowing down and the buyer can get remorseful and want to cancel.
3. Employees can spook your buyer by saying the wrong things and cost you a sale.
Both employees and customers get apprehensive about this "unknown factor". They don't know who the new owner is and always anticipate the worst.
Wait until the last few days before closing escrow to tell them.
How do I tell my employees?
After being sure your deal is solid and very close to closing (a few days away), I like to call an employee meeting.
At this meeting I want to have my buyer present. Prior to the meeting I will inform the buyer on how I want to conduct the meeting and what I want him to say. As the seller I still want to control the meeting. I want my buyer to say that they will not be making any big changes in the business. They should inform the employees that they all still have their same positions and schedules, with the same pay rates. Meeting the buyer and hearing that everything will stay the eases their fears. It also puts a face on the buyer. They see the buyer is not a monster. They then can ease your customer's fears too.
If your business has a Liquor License, you should have this employee meeting the day before you post the ABC public notice poster. Once this 30 day ABC posting goes up in your window, the cats out of the bag. The worst thing to do is post your business and bury your head in the sand. Customers and employees will ask questions about the buyer so be proactive and handle this with a meeting. Once your employees are comfortable about the buyer, they naturally communicate a good message about the buyer to the customers. It makes the transition much smoother for everybody.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|William F. Ziprick, Attorney: Legal Services For Buyers And Sellers
Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.
|Shalonda Chappel: Escrow & Bulk Sale Services - Southern California
Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.
|Diane Boudreau-Tschetter: Escrow & Bulk Sale Services In California
California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
|Helen Yoo, New Century Escrow - Escrow Services In Southern California
Helen Yoo at New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Brad Steinberg, Business Broker: Laundromat Specialist
PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.
|Brian Loring, Broker Specialist: Property Management Businesses
Brian Loring, CBB, CVB, ARM at ManageVisors (owned by property managers): Assisting business buyers & sellers with property management, property-related services: residential, commercial, associations, vacation rentals, landscaping, janitorial. A sales advisory, consulting firm. 661-360-1769 Cell.
|Larry Larsen: Laundry Consulting, Brokerage, Insurance
40+ years of experience in the sales, ownership, management, and construction of laundries. He is a licensed broker active in the sale of laundries, licensed insurance agent specializing in laundry insurance, remodeling, new equipment. Larry Larsen - phone me direct at 714-630-9274 or 714-630-Wash.
|Chris Seaman, Business Broker: Southern California
Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.
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