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Selling your business requires retaining key staff. Offer a retention bonus to incentivize them to stay through the sale and beyond. Don't pay it all upfront to avoid post-sale departures. Consider splitting it: part upon sale completion, the rest after a set period (e.g., 1 year) if the employee stays.
Owners looking for approaches to retain key staff when the business is going through a sale or exit process.
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Suggest questionSelling a business can destabilize your team and lead to the loss of key employees. Here’s how to prevent issues and retain key employees when selling.
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Losing key staff can not only cripple a business, but destroy your chances of selling. In this video, we’ll run through HOW to avoid this by not only retaining your key staff during a business sale, but getting their help in the process.
When selling a business, consider that the sale process can destabilize your team. If not handled well, this can lead to losing key team members.
Fear of this happening can paralyse a business owner from taking any action towards selling, rendering the owner a prisoner in their own business too scared to sell in case it triggers an exodus of customers and staff.
Fortunately, there are a few simple strategies that can not only reduce the risk, but increase the overall value for any buyer.
If you found this video helpful, we’d appreciate a share or a thumbsup! Head over to to check out our ‘How to Sell A Business & Realise Maximum Value from your Sale’ resource for plenty of other tips and strategies for improving the outcome of your business sale process.
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losing key staff could not only your business but could destroy your chances of selling it in this video we'll run through how to avoid this by not only retaining your key staff during the sale but by getting their help during the [Music] process when selling a business you need to consider that the sale process itself could destabilize your team if it's not handled well this could lead to losing key team members and a fear of this happening can paralyze business owners and render them prisoners in their own business they could be too scared to sell in case it triggers an exodus of Staff put yourself in the shoes of a buyer you'd want to make sure that the business you're acquiring is stable and that it can maintain its performance at the current level after the sale this would be consistent with how they've calculated the value and what you'd be looking to pay but if there's a question about the potential loss of key staff or their reliability or commitment to the organization this dramatically increases the risk to a buyer higher risk equates to a lower valuation or it could even be a deal breaker one way to stabilize your team is to offer your key staff a retention bonus a key objective is to align the interest of all stakeholders including the owner the buyers and the team and to encourage your employees to perform better during and after the sale process our retention bonus can facilitate and encourage that to happen now we don't suggest you think of offering a retention bonus as being a bribe to your employees but rather as a thank you for contributing to the value of the business over time for participating in the sale process and for agreeing to commit to assist the new owners settle in let's look at the structure of a retention bonus it would be self-defeating to offer a bonus that's payable as soon as the business is s this would increase the risk of the buyers losing those key stuff as soon as the deal's done that would clearly be counterproductive and once the buyers understand that's the case it could be a deal breaker for them as the risk would be too great instead it would be smarter to offer part of the bonus payable on settlement of the business and another component after an agreed period say 12 months later provided the key team member stays on with the business so for example 30% on completion of the transaction and 70% of a retention bonus 12 months later this encourages the team to work together with the new owners to get to know each other it also provides the buyer with greater confidence that the staff are incentivized to stay during the high risk period for the buyer and for the business in summary don't offer a retention bonus if you don't believe you need to if you do believe you need to then make sure you don't structure it to pay it all on completion as that will probably kill the deal for the buyer instead offer to pay part on completion and another component later for example 12 months later provided the key team member is still working in the business that way the goals of the seller the buyer and the team will be aligned I hope you find this video useful we'd appreciate your feedback
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About DIVEST MERGE ACQUIRE
Welcome to the TonyBrown.net YouTube Channel!
I'm Tony Brown, and through TonyBrown.net we help a global audience of Business Owners and Investors understand the in’s and out’s of business sale transactions, and how to prepare themselves and their businesses for the most important transaction in their business lives.
From all my years in Mergers and Acquisition's, advising business owners, investors and listed companies totalling over $1B in value, it's clear an overwhelming majority of business owners have been ill-advised for years and only learn critical steps to maximize their value when it is too late to do anything about it.
TonyBrown.net was setup to educate business owners and buyers, preparing them for the biggest transactions of their lives.
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