by Jock Purtle
Making an exit from the business you’ve built can be an entrepreneur’s ultimate dream. You get to move onto bigger and better things while receiving a massive cash windfall.
However, for the employees of the business being sold, life can be anything but exciting, and looking forward to a future when there is so much uncertainty can be incredibly hard to do.
If you are planning on making an exit from your business, you are going to need to keep your employees happy and motivated during course of the deal. This will help everything progress forward as smoothly as possible and help them to transition calmly as well. And after all that loyalty, that’s what they deserve, right?
When your employees learn about your decision to sell the business, they are going to feel a huge sense of uncertainty. They will be wondering what is going to be changing and whether they will even have a job once the deal is done.
After handling so many website sales, I have seen both sides of the deal. Here are a few of the insights I’ve gained into what it takes to make sure your employees are happy and motivated throughout the process of selling your business, and solid rules for managing company culture through any point of major transition, including mergers and acquisitions. I hope this helps you learn how to motivate your employees when selling your business.
Culture of Transition Rule #1: Be Upfront and Honest
The biggest and most important rule you need to follow before you start preparing for the exit is to be completely open and honest with your employees.
It would be best to tell them as soon as possible and let them in on what they should expect from the process. If you don’t, they will find out on their own when you have buyers digging into your business and asking them questions.
By not telling them what will be happening, you’re going to destroy the trust that they have in you and will amplify the feelings of uncertainty that they will be dealing with.
Most likely they will begin leaving you for other employment as fast as they can. This exodus of staff could drastically affect your business’ worth and might even kill the sale altogether.
Instead of taking that chance, make sure you tell them of your intentions. Then, let them know what they should expect, such as auditors coming in to look at the business and ask them questions. Also let them know what they can and cannot share publicly and when.
Culture of Transition Rule#2: Don’t Overload Your Employees
Your employees may become overwhelmed with news of the sale. The last thing you want to do during this time is to overload them with even more work than they’ve already been doing.
Instead of loading them down with more tasks, try to prepare for the exit by yourself, at least as much as you can.
This doesn’t mean that you let them slack off on their duties, but you want to ensure they’re able to stay relaxed and confident about their future in your organization.
If they become overloaded and bogged down, morale will sink and the whole team could become completely unproductive. That would be bad for everyone.
Culture of Transition Rule #3: Remind Them What They’ve Done for You
If you want to instill confidence in your employees, take a step back and catalog everything that they’ve done for you. Note how their role in the business has helped you get to where you are.
You can create handwritten letters to each of them, outlining your thankfulness for them being a part of what has helped you become so successful. And don’t be afraid to put it on their LinkedIn Recommendations — though only if you are willing to do something so public for each of your core team.
You may even want to consider giving them an incentive or bonus if they stay with you through the completion of the sale. This would go a long way towards keeping the business steady until the deal closes.
Doing this is going to let them know that you’re thinking about their role in the company, while also making them feel appreciated. It will help build their confidence that they’re not just another cog in the bigger wheel that you’re making an escape from.
Culture of Transition Rule #4: Find the Right Type of Investor
Many entrepreneurs find themselves looking toward big banks and corporations when they’re trying to find an investor to buy their business. While this is great for their own pocketbook, it can wreak havoc on the morale of the business’s staff.
Big banks and corporations tend to believe in one thing and one thing only: the bottom line.
That means, rather than keeping your staff, they’re going to be looking to remove as many people as possible and replace them with those who will work for less money or put in more hours.
Maintaining the spirit in your business is going to be impossible if you’re getting taken over by a big bank or corporation that has this attitude.
If it’s not too late already, attempt to find an investor that appreciates the company culture that you’ve built and will vow to keep that culture intact after they acquire the business.
Culture of Transition Rule #5: Include Stipulations in the Deal
If you do find yourself working through the terms of the deal with a large corporation or big investment bank, there are still ways you can keep your team protected.
You can work for terms and stipulations that key employees and team members are going to remain secure in their duties, even after the business has been sold to the new owners. But, again, this is your reputation once you leave, so only vouch for employees you think add value to the deal.
Culture of Transition Rule #6: Keep Your Team Involved
Uncertainty will absolutely kill morale in your business during an exit transition. The best way to make sure you’re able to keep your team members happy, motivated, and confident is to make sure they’re involved in the process as much as possible.
Many of your employees are going to be involved in the transition process, helping your buyer perform due diligence, so you want to prepare your team members for what’s coming.
By preparing them this way, they will be more cooperative during the procedure. This will help you as well as the buyer. That may make them more valuable in the new owner’s eyes, too.
The Takeaway
The goal with any deal is to make sure you’re able to successfully transition out of the business that you’ve built without causing alarm in your employees.
Achieving this will make sure your investors are able to successfully take over the business, and that your team will be taken care of once the deal has been finalized.
How do you maintain company culture during a time of transition? How have you motivated employees during a sale? Share your tale below!
I totally agree with you when you said that you need to be completely honest with your employees if you decided to sell your business. Recently, my boss told us in a meeting that he would like to enjoy the rest of his life with his family and not being worried about anything. At some point, I think he was referring to selling his company and it would be great if he let us know with time ahead.