So you’ve decided to sell.
You may be excited. Or just relieved. A weight off your chest (not to mention your mind!). Maybe you just want to go and tell everyone, right now.
However there’s more to this section than meets the eye. There are risks in any business communication, which if you’re not careful, could hit you where it hurts. In your wallet!
Caution is advisable.
The purpose of this how-to article is to guide you through the process of communicating your decision to sell, helping you to minimize the risks. It covers the following:
- Who’s affected/needs to know
- Understanding the psychology of change
- Having a clear Communication Plan
- Scheduling communication actions
This how-to guide is slanted towards communication with your staff, because it’s vital to keep them motivated. Informing family and fellow Directors/shareholders is not specifically covered here. However most of the principles are generally applicable and can be referenced for any stakeholder communication.
Let’s take each of these sections in turn:
1. Who’s affected
There may be more people affected than you think. Of course a lot will depend on the size and turnover of the business, the number of employees and directors, and so forth.
And of course different people are affected in different ways by your decision. It’s prudent to decide who needs to know, and in what sequence they should find out.
Let’s call these different groupings "stakeholders”. The implication for each stakeholder depends on their relationship with the business.
It’s a good idea first to list all the categories of stakeholder and, where relevant, the names of key people within each. You may find it helpful to rank them according to the relative importance of the decision to them. Note next to each what you consider to be the likely impact.
This exercise will also help you to prioritize.
The list of stakeholders below is not exhaustive, but here are a few of the important headings:
- Family, important others
- Key employees
- Other staff
- Distributors, partners
- Local media
- Trade media
- Advisers – accountant, attorney etc.
- Government registrations, tax
- Competition (because they’ll find out sooner or later!)
These represent potential communication targets when it comes to creating your Communications Plan (see Section 3 below).
Video: Business owners often worry about when (and how) to tell employees. Tony Brown explains what you need to know and how to do it.
2. Understanding the psychology of change
People differ in their acceptance of change.
This affects their behaviour, which can then have knock-on effects for others, and for your business. None more so than your employees.
It’s fair to say that most people rate stability and predictability in their lives very highly. Keeping an even-keel is a common consideration.
Many people don’t cope well with major change. This is particularly so when it’s thrust on them with little warning. It brings sharply into focus what they might have to give up. They can feel very awkward and alone, even when others are in the same boat.
Then there are those who actually embrace change, seeing it as an opportunity for prosperity, challenge and personal growth. It’s this group that can become your real disciples in the change process on which you are about to embark.
Let’s take a little time to look at a simple change model to put all this in perspective. This broadly applicable model identifies seven key factors in change situations that require careful management.
In a change situation it’s all about how people are feeling, at different times. Listed roughly in chronological order, the feelings are:
i. Great discomfort
iv. Overwhelmed (from amount/speed of change)
v. Psychological un-readiness (varying degrees)
vi. Insufficient resources to cope
vii. Tendency to revert back to old ways
Why should any of this matter to you?
Well, your aim is to persuade a buyer to agree to your asking price. To demonstrate that your business is an ongoing concern, with no surprises.
All your staff will have to know sooner or later that you’re planning to sell-up. So it’s imperative to recognize these natural human feelings so that they can be successfully managed. If you can get them on your side, that’s half the battle.
Of course, depending on the buyer’s post-purchase intentions, there may be little for most staff to worry about. Besides, many of these challenges will be for the new owner to manage.
Rest-assured, that these thoughts and fears will be present in people’s minds the moment they know of your decision. It’s best to deal with them in the context of your sale decision, before they become a problem. Worst case, they’re a potential barrier to the sale.
They’ll also influence the content and messages in your Communication Plan (see next section). So here are a few practical steps you can take:
For i) – be sure to acknowledge their uneasiness – it’s only human to feel this way
For ii) – avoid pushing the benefits of new ownership, as it’s doubtful they’ll see anything in it for them – acknowledge their current feeling of loss, and give them time to come to terms with it
For iii) – include and involve people in finalizing the business transition plan, which after all, is to everyone’s benefit
For iv) – show leadership by prioritizing pre-sale actions, and check that they’re successfully completed
For v) – accept people’s different state of readiness for change to new ownership, handling it sensitively – avoid specific criticism of individuals
For vi) – manoeuvre around the excuses often raised (lack of money, time) aimed at stalling necessary short term change actions - encourage creative solutions, perhaps offering a specific incentive for successful completion
For vii) – keep everyone focussed on the outcome - building within the overall plan some leeway when allocating time for individual tasks - closely manage the journey through the process
This leads appropriately to the Communications Plan where the above considerations can be incorporated, in the way messages are constructed and communicated.
3. Communication plan
A clear Communications Plan is essential because the last thing you want is for information to leak out in an uncontrolled fashion. It’s advisable to involve key employees in the business when developing this plan. The persons you’ve confided in from the start. Perhaps your business sale team, which may involve external advisers.
Ensure clearly assigned responsibilities and timescales including milestones, ideally with defined plan stages.
Here’s your Communication Plan template
Objectives – what you want people in each stakeholder group to think, and do, after the communication is received and understood
Key Messages – be clear what these messages are, and how they need adaptation for each stage of the sale process – taking into account the psychological factors highlighted in Section 2 above
Targets – the different stakeholders (as in section 1 above), and how the message requires adjusting for relevance to each audience
Methods – the specific methods most suited to each audience and situation, and the most conducive environment – individual one-to-one meetings, group briefings, PowerPoint presentations, website news and blogs, social media, press releases, email shots, formal letters, telephone, and so forth
Responsibilities – who will do which tasks
Timing – including "achieve by” dates, milestones, perhaps within identified stages of the plan
Budget – for expected costs, for example taking staff on an off-site briefing, or planning wider involvement in transition planning sessions
Measuring success – diarize regular review meetings to ensure that everything remains on track, taking corrective action where necessary
It’s a good idea to go through this template for each of the key stakeholder groups you’ve identified in Section 1 above. Type it up in bullet point form, keeping it short.
You’ll have your own plan for communicating with buyers: prospective, shortlisted, preferred candidate. This checklist works equally well for this communication planning too.
Until final legal sale documents have been signed by you and the buyer, and the sale is public knowledge, be very careful about confidentiality.
Video: David Barnett addresses confidentiality issues when selling a business.
Think confidentiality with everything you do. So, for example, avoid accidently leaving a copy of your Communications Plan on the general company printer!
You’ll personally know many of the targets involved and so you can choose the most appropriate communication methods for each. Also, think how you’d feel if you were in their situation. How would you like to be treated?
Texting is likely to rank low in the list of chosen methods. You may write a letter at the appropriate time to formally notify the completed business sale to State and Federal authorities.
Think of communication costs as an investment. That is aimed at keeping staff reassured, motivated, and "on-side” with the change of ownership. So you’ve more chance of a successful sale at your asking price.
A respected leader, who inspires trust, empathizes with other people’s situation. It’s important to avoid breaking this trust at this crucial stage.
This doesn’t in any way imply weakness. You won’t go far wrong by being honest, frank and factual:
- Tell them what you can tell them now
- Tell them when you know, but can’t tell them (perhaps in answer to a direct question)
- Tell them when you genuinely don’t know the answer
By following these simple rules with all stakeholders you won’t go far wrong. And you’re much more likely to retain that all important support of others, essential to a successful sale as an ongoing business.
4. Scheduling communication actions
ExitAdviser’s aim is to help simplify the sale of your business.
As you will appreciate from this how-to guide, in order to achieve a successful sale it's very important to plan and action communication activities. Including milestones and review points so that you can stay in control of the process.
You may have your own methods for diarizing future actions. For your convenience, each Step in the ExitAdviser Scheduler has its own Action Notepad, keeping everything together in one place, online.
Once all actions are completed, the overall Step is ticked off as completed in the Scheduler. At any time you can print off a copy of the Scheduler including all your latest notes.