When should I tell my customers and staff that I am selling the business?

These decisions have to be taken on a case-by-case basis. However, unless your business has a contractual commitment to seek approval from a customer under a ‘change of control’ clause within your customer contracts, then we would recommend that you do not inform customers of a sale until after completion. This is because there remains a risk (albeit a reducing one) right up until completion that the deal may not go ahead.

Agreed communication strategies

The later in the process you make an announcement to your staff, the more confidently and reassuringly you can speak about the new owner, and the opportunities for your staff that the sale of your business will create. When it comes to an announcement to all staff members, communicating the news of the sale should ideally be done face-to-face, and typically immediately following the legal completion of the sale.

A commonly favoured option is to have the new owner join you in the room, allowing you to share with clarity the future plans for the business. An experienced buyer will have walked this path on several occasions before and will have most likely honed the most effective way to communicate the change in ownership. The right approach will be discussed, and a formal communication plan agreed between buyer and seller in the weeks before completion.

Key messages

Understandably, your employees will want to know that their jobs are safe, and that their working life will continue with minimal change. Once they have been given this comfort, they become a significant ally in delivering the key messages to your customers and suppliers in a consistent and structured manner. It would not be unusual that key customers/suppliers are informed before a wider announcement is made.

There is typically good reason to involve key staff/senior management relatively early in an intended sales process. Indeed, a buyer or investor may often request to meet the individuals who will help drive the business forward post sale as part of their DD. If you are considering a Private Equity (PE) deal, then your senior team will need to be heavily involved from early on in a sales process. This is because a PE investor will ultimately be backing a management team to grow the business, enabling the founders to exit completely.

Some buyers will insist on discussing the acquisition with some of your key customers before they complete the deal

Any sale process requires the need to produce a significant amount of financial information. Accordingly, if your Finance function Lead is not a shareholder, we would suggest they are brought into your confidence early as he or she will be invaluable as the business is prepared for market. Furthermore, their involvement in the sale process will help reduce potential distractions for you, ensuring you can focus as much time as possible on delivering your business plan, at a time when your performance is being carefully monitored by the acquirer.

Some buyers will insist on discussing the acquisition with some of your key customers before they complete the deal.  They will want to make sure customers will be happy to continue to work with your business under their new ownership.  If required, these discussions are particularly sensitive and should therefore be left to the final days of the transaction when everything else is fully agreed, and they must be carefully planned, scripted and managed.