Keeping the staff and the customers through the change of ownership

In a small business the goodwill is people: the employees who know how it runs and the customers who have a relationship with someone in it. Neither is transferred by a contract. Timing first. Announcing too early risks the deal falling through after the staff have started looking; too late and people find out from a rumour. The common approach is to tell key employees under confidentiality during diligence — partly because the buyer needs to meet them — and the rest at or immediately before closing, from the seller and the buyer together. What employees want to know is short and specific: do I still have a job, does my pay change, do my benefits change, who do I report to. Answer those in the first conversation. In an asset sale employees are technically terminated by the seller and hired by the buyer, which affects accrued leave and benefit eligibility and needs to be planned rather than discovered. Customers next. The strongest handover is the seller introducing the buyer personally to the accounts that matter, over a period, rather than a letter. This is precisely what the transition agreement should require, in writing, with hours attached. Two provisions worth negotiating: a retention arrangement for key employees through the transition, and a seller non-solicitation covering both customers and staff. And keep the things that carry the relationship: the phone number, the email domain, the social accounts, the review profiles. Buyers forget to list them and they are frequently where the customers actually are. This article is general information, not legal, tax or financial advice. Rules change and every deal is different — check your own case with a licensed professional. Alberto Zaltzberg — Adonait · adonait.com