If you’re preparing for a sale of your accounting practice, it’s normal to feel nervous about leaving key staff out of the loop. After all, they’re like family. Maybe they have been loyal for a number of years, so you feel like not telling them is a betrayal. You feel an obligation to be transparent and honest which is admirable but more often than not, telling them you’re selling does more harm than good.
We strongly recommend NOT telling staff until after close.
Here is why in a nutshell:
● Your staff will jump straight into the uncertainty of their future the second you tell them you are selling. They get nervous and start to ask questions like: Will my working conditions change? Will my pay change? Will the new owner even want me? Will the new owner be good to me? etc…
● This uncertainty leads to action… they’ll update their resume/CV, ask around, maybe even talk to clients – which if your clients leave in anticipation of a sale, you may inadvertently devalue your firm before you’ve sold.
● The ONLY way staff get comfortable is by getting to know the eventual buyer and working with them. By announcing right after the closing, you minimize the time of uncertainty. Therefore, you tend to minimize the risk of staff leaving.
● The details of your practice sale will not be broadcast out to anyone and everyone (when you sell with PGA). Our process is designed to help protect your confidentiality so that staff and clients won’t find out. Could they find out? Yes, if they are looking for a practice to buy, they might put 2 and 2 together and that has happened before but it’s rare.
● We require every buyer to sign a confidentiality agreement, and oftentimes our sellers request to share their confidential profile ONLY after receiving a name and city of an interested buyer. This helps ensure that your employees and clients find out about a transition after you’ve sold…from you.
We’ve helped transition hundreds of firms – and anytime someone selling says they want to tell their staff collectively as a team we go, “Oof No. Don’t do that.” It’s like a gut reaction for us because we’ve seen the harm it can do. It has caused deals to fall through and oftentimes integral employees walk away. It leaves firm owners with a tougher practice to run and sell. Telling staff too early can also harm the buyer months after a closing if employees sent out resumes prior to a finalized sale.
Our general rule is: Don’t tell your staff you’re selling.