If you decide to sell your business, there’s going to be a lot of planning and administration involved. One thing that might not spring to mind instantly is how the move will affect your employees, so here’s some guidance on how to manage the transition period after sale seamlessly.
When a business is in a transition period, those in charge barely have a minute to spare, and when there’ a lot of work to do it can be easy to let one of the most important elements slide – the people.
Regardless of the size of the business, the employees are what make it – and morale is crucial at any stage of the company lifecycle.
When a company decides to sell, for any reason, it can make the employees feel unsettled. Put yourselves in their shoes – they’re likely to have a lot of questions.
Why was the company sold? Will my job be safe? How will I work with the new boss?
Employee morale, or how a person feels about their job and workplace environment, is proven to have a huge impact on productivity. Keeping them in the loop at the point of sale and clearly communicating the changes that will be made at the company may pay off in the long run.
The dangers of low morale
A workforce with low morale might sound like a soft issue at first, but it very quickly makes its presence felt in more tangible ways.
A less engaged employee will not be trying their best, and lower concentration can lead to mistakes, delays on deadlines and shoddy work. In addition, it is likely to increase staff turnover as employees get bored and seek pastures new and, in some cases, it can increase instances of absenteeism.
With less work being done and mistakes made that could potentially be costly to the company, low morale really starts to add up.
Then of course, when employees leave for whatever reason, there’s the cost of replacement. The new owners might have to pay an agency to do it for them, or take time out of their schedule to source the right person for the job. Once they’ve been found, there’s also the cost of training. Could all of that be avoided by making your employees feel more valued in the first place?
If you decide to sell your business, this can have a negative effect on morale if not handled correctly. You will need to keep staff in the loop as much as is appropriate and make sure that new managers are brought on seamlessly.
Huge upheavals in the work place will make employees feel uneasy and unsettled, so where possible ensure there is a comprehensive handover process to make things smoother for everyone.
If a buyer believes morale will be affected when purchasing a business, this will likely lead to a lower offer, or terms may even be written into the contract of sale that allow them to claw recruitment costs back from you, even after you’ve sold the business.
Introducing a new manager
When looking to sell your business, you need to be honest with yourself about how much value you add to the company.
Does the company make a profit because of your personal relationships with clients? Is most of the filing stored in your head? The buyer needs to be able to step straight into your shoes, and as delegation can be a challenge for many who have built a company from scratch, the handover process can be difficult.
Clearly document everything you do in order to create a complete handover document. Removing your personal involvement from the business as early as possible will only increase the confidence a potential buyer has.
Another thing to consider when a new boss comes aboard is the company culture – debrief them about all the unspoken rules and quirks of the company that longstanding employees pick up by osmosis. This will allow them to acclimatise to their role more easily, and if necessary, make changes.
Lastly, and perhaps most importantly, ensure that everyone knows exactly what their responsibilities are, and what they are accountable for. Everyone needs to know who they report to, and where to go for help or advice.
Selling your business and introducing a new boss doesn’t have to bring about chaos, but it will go more smoothly if you employ a bit of empathy. It can be confusing for employees, and perhaps even intimidating for the new boss – but if you’re there to bridge the gap you can make your business stronger during its transition period. With any luck, it can go on making a profit long after you’ve sold.
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