When the time comes to sell your company, it’s important that you control the flow of information and details. If people surrounding you find out your plans in the wrong order, chaos may ensue and kill any deal you may have had.
This is especially true when handling the most important component of the deal, your employees.
Nearly all HVAC related business owners know how hard it is to find and retain good technicians and this trend is expected to continue. The Bureau of Labor Statistics predicts the demand for HVAC technicians to grow 13% between 2018 and 2028, much faster than the average for all occupations.
“That’s precisely why business owners need to have a plan to inform employees about a sale,” says Patrick Lange, a business broker with Business Modification Group. “It’s among the largest reason a buyer would be interested in acquiring your business. Your employees are familiar with your processes, have a relationship with major accounts and most are likely fully trained. They’re your biggest asset and also your biggest variable.”
When to tell your employees
Lange recommends not telling your employees about the sale until the deal is done. While some may disagree, Lange makes a good argument. “There’s just too much at risk to take the chance. Understand that employees work for someone else because they need the security of a paycheck on a regular schedule. Most are risk-averse, otherwise, they would own their own shop. To share information with them too early sends them tumbling into what-if scenarios. As a result, they can make irrational decisions that result in poor consequences for them and the business owner.”
Most HVAC business owners are genuinely good people and want to treat their employees fairly, especially long term ones where there are even friendships.
So how do you do that without appearing as deceitful and greedy when they learn the business was sold?
Lange recommends taking a step back and viewing the situation from the perspective of each party. The buyer wants all employees to come along with the sale and have as little disruption as possible. They want to start the relationship with employees positively and on good footing.
The employee wants the same thing and fears change because it brings uncertainty and puts their primary income stream at risk. They’re scared and want reassurance.
The business owner wants the deal to close and cash out of decades of hard work so they can move onto the next phase in their life with financial security.
Lange suggests including your buyer in the conversation about how to break the news to the team. Have one on one conversations quickly with key employees. Be creative on your incentives and make them tied to stability like offering a bonus to stay on, paid out after 6 or 12 months. The smoothest deals Lange has been part of have had a closing in the morning and employee conversations that same afternoon.
One thing is for sure. The news will spread like a wildfire so do whatever you can to tell everyone on your team on the same day. Failure to do this means you run the risk of rumors and false information running rampant. If you don’t control the narrative, people will fabricate their own realities.