Announcing the sale to your employees and clients

When announcing the sale of your business, the order matters as much as the words: key people first, under confidentiality, then the whole team on announcement day, then major clients and suppliers, in person. The message has to say clearly what changes, what doesn't, and who's in charge from now on.

Why a bad announcement is expensive

A well-negotiated sale can lose value in a few days if the announcement goes wrong. A key employee who hears it through the grapevine starts looking elsewhere. A major client who hears it from a competitor wonders whether the service will hold up. A nervous supplier tightens payment terms.

Buyers think about this during negotiation. They want to know how and when the team and clients will be told, because those are the people they're buying. A written communication plan is part of the Transition Document, just like the first-100-days plan.

The four circles of the announcement

Think of the announcement in circles, from closest to farthest.

1. Key people, before signing

Your controller, your operations manager, perhaps your sales lead. The people the buyer will need for due diligence, or whose departure would sink the deal. They sign a confidentiality agreement. A retention bonus is often discussed with them: have your lawyer draft it.

2. The whole team, on announcement day

One meeting, in person, with everyone at the same time. Not an email, not a floor-by-floor announcement. The successor is in the room. You speak first, then hand over. If there's a union, your lawyer will tell you in what order to inform its representatives and what the collective agreement provides.

3. Major clients, in the days that follow

A call or a visit, by you and by the team member who holds the relationship. The message: who's taking over, who their contact will be, and what stays the same. If a contract requires the client's consent to a change of control, that conversation happens before closing, with the buyer.

4. Suppliers, the bank and the community

A letter or a call to your main suppliers. A meeting with the bank, often already involved in the financing. Then, if you wish, a public announcement: local paper, social media, business association.

What the message has to say

In the shock of the moment, employees retain two or three sentences. Choose them in advance. A good message answers four questions:

1. What's happening? The business is changing owners, and who the new owner is.
2. Why? Your personal reason, said simply: retirement, health, wanting the business to carry on.
3. What isn't changing? Jobs, the name, working conditions, client contacts, if they aren't changing. Don't promise anything the buyer hasn't committed to.
4. What comes next? Your role during the transition, your departure date, and who to ask questions.

Prepare answers to the hard questions: "Is my job safe?", "Are prices going up?". If you don't know the answer, say so, and say when you will.

On jobs, one useful reference point: in Quebec, selling the business does not by itself end employment contracts; they carry over to the new owner. That doesn't guarantee anyone a job forever, and the effect depends on whether the buyer takes the shares or only the assets. Ask your lawyer what you can say, word for word, before the meeting.

What not to say

Some well-meant phrases backfire. Avoid them:

• "Nothing will change." Something always changes, starting with the owner. People know it, and this phrase makes them doubt the rest of the message.
• "Your job is guaranteed", unless the buyer has committed to it in writing.
• "I'll always be here." If you're leaving in six months, say so. The team needs to know who to turn to after that date.
• Any figure from the deal. The price and terms stay confidential, even when people ask in good faith.

Thursday at 3 p.m., in Estrie

Here's a scenario invented for the example. A door and window manufacturer in Magog, five million dollars in revenue, 28 employees. The 63-year-old owner is selling to a larger manufacturer in the region that wants to add a plant.

During due diligence, only the controller and the production manager know. They've signed a confidentiality agreement, and a retention bonus has been negotiated with the buyer.

On signing day, a Thursday, the owner stops the line and gathers all 28 employees at 3 p.m., before the shift change. In five minutes, he explains why he's selling, who's buying, and that the jobs and the name stay. The buyer's representative introduces herself and takes questions. The next morning, the sales manager and the owner call the eight largest clients, mostly residential builders. The following week, a letter goes out to suppliers. Nobody heard the news through the rumour mill.

Checklist: your communication plan

Prepare it while you prepare the sale, not the night before:

• The list of key people to inform before signing, and the confidentiality agreement they'll sign.
• The date, time and place of the team meeting.
• A five-minute written message that answers the four questions.
• The ten most likely hard questions, and your answers.
• The list of clients to call, with the person calling alongside you.
• Contracts that require consent on a change of control (check with your lawyer; see putting your agreements in writing before you sell).
• The supplier letter and the timing of the bank meeting.
• Who handles media or outside calls, if any.

What if the team finds out too early?

A sale takes months, sometimes years, to prepare, and people notice unusual visits. If someone asks, don't lie. Say you're preparing the company's future, nothing is signed, and you'll talk to everyone at the right time. A business that already runs without you causes less worry: employees know their work doesn't hinge on your presence. That's one of the less visible effects of step 6: the Transition Document. For an internal sale, the dynamic is different; see selling your business to your employees.

How we frame the whole process is described on sell my business.

Do it with a pro

Alone, owners tend to improvise the announcement in the emotion of the moment, and that's often when a key employee or client is lost. With us and our regional partner, the communication plan is prepared months ahead, with the buyer and your lawyer, so everyone hears the news from the right person, at the right time.

Owner independence