July 25 2017 - Buying or selling a business affects a lot of people - namely all of the employees that work for or with that business. It's going to be a huge adjustment for them, and you're responsible for facilitating that adjustment. Business is business, but this is an instance in which people need to be put first. If you don't handle the situation properly, things can get bumpy later on down the road. Make sure you're covering your bases when dealing with the employees you're passing off or inheriting.
When You're Selling
If you plan to sell, you need to tell your employees as soon as you know it's a sure thing. This will give them time to make different arrangements if they don't want to continue working under a new owner. If you wait until the last moment, they won't have enough time to make important decisions about the futures of their careers.
You'll also need to talk to the people or group that are purchasing your business about what they intend to do with your current employees. If you want to retain as many positions as possible, you'll need to work that into your deal. You can get a valuation from a company like Digital Exits and use that as your talking point.
Take a look at your leave entitlements. Up until the business has completely been taken over, you're still responsible for taking care of hourly wages or salaries of those employees. They can still use everything that came with your employment, including healthcare and things like paid sick time or vacations. They might want to use that time to seek employment elsewhere.
When You're Buying
When you purchase a business, you do not have to keep the employees of that business. If you've made other arrangements, keep that clear from the beginning. It may be worth your while to retain as many employees as possible - they're already versed with the ins and outs of the job, and you'll have a hard time finding better candidates if you intend to keep the business the way it already is.
You don't have to utilize the terms that the previous owner used. If you want to change things up, make sure you've drafted up clear agreements that the employees you're inheriting will agree to. It's their choice whether or not they stay with you. It's more than likely in your best interested to consult with the employees you want to retain before you draft this agreement. Even if you're changing the terms, they may still stay on.
Whether you're selling or buying, the employees involved are going to have some strong reactions. Their careers are a major part of their lives, and change can sometimes lead to an uncertain future. While you do have the freedom to do whatever you want, compassion always helps. You need to be understanding about how the affected employees are going to feel.
Make sure you're communicating with the affected employees as frequently as possible. Let them know what you know as soon as you know it. Make sure their voices are heard (even if you're unable to act in their best interests), and be patient with everyone while they're figuring out what their next moves will be.
About the author
Having a background in communications and management, Amber Brunning often writes about small business and budding entrepreneurs. When not working, you can find her online chatting with her friends or reading industry blogs. Connect with her on Twitter.
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