I'm in the early stages of selling my manufacturing business (about 40 employees). I'm trying to figure out the right time to tell the team. I want to be transparent, but I also don't want to create panic or lose key people before the deal is done. Has anyone been through this? How did you handle it?
Employee Communication
When should you tell employees you're selling?
We told our team about two weeks before closing. It leaked anyway a month prior. In hindsight, I wish we had controlled the narrative earlier. But it's a tough call.
Wait until the deal is signed. Unless you have a legal or fiduciary reason to disclose earlier, there's no upside. Employees can't unknow that information, and some will start looking for new jobs immediately.
That's what our lawyer said too. But the leak made it worse. People felt blindsided.
How big is the company? 40 people is small enough that rumors spread fast. You might want to tell your key managers sooner than the rest.
CobaltTiger, that's a good point. I have three managers who run critical departments. I was thinking of telling them first, maybe a month before closing. But But I'm worried they'll leave if they know.
If they leave, they were going to leave anyway. Better to find out now.
I've sold two businesses. First time I told everyone early and it was a disaster. Second time I waited until the ink was dry. The second time went much smoother. Employees were shocked but they got over it quickly.
juniper_jim, did you have any key employees you were worried about losing? I think that's the OP's main concern.
Yes, my operations manager. I pulled him aside a week before closing and offered him a retention bonus. He stayed. But telling everyone eary? No way.
There's also the customer angle. If employees know, they might tell customers. That can kill the deal.
mossy_rock brings up a good point. I've seen deals fall apart because a salesperson blabbed to a client
The customer risk is real. We have a few large accounts that would be nervous about a transition. I think I'll hold off on telling the broader team until the deal is signed. But I'll talk to my managers sooner and offer retention packages. Thanks for the input.
Sounds like a plan. Just be prepared for the rumor mill.
Good luck. And don't forget to have a communication plan for day one after closing. That's just as important.
One more thing: make sure your managers know what they can and can't say. You You don't want them speculating with their teams.
Let us know how it goes. I'm curious if the retention offers work.