How and When to Tell Customers You’re Selling the Business
Transparency, timing, and clear communication are important factors when preparing to tell customers about the sale of your business. Being open about the sale and choosing the right moment to inform customers can build trust, manage expectations, and ensure a smooth transition. While transparency is important when sharing with customers that you’re selling the business, it's equally essential to maintain confidentiality during the sale process to protect sensitive information. By balancing transparency and confidentiality while working to protect everyone's interests, you can set the new owner up for success and maintain customer loyalty.
When to Tell Customers About a Business Sale
There isn’t a magic timeline when it comes to informing customers about the sale of your business, but it is respectful to tell them before the sale is completed. It’s especially important if you’re in an industry where client relationships are pivotal or fragile. Once the deal is certain (but not finalized), you should feel safe making key clients aware of the change.
Some customers, especially in the service industries, benefit from upfront communication to allow time to resolve pain points or complete contractual obligations. That said, it’s not your role to communicate any special offers or changes to the value proposition that may come into effect under new ownership.
If faced with customer concerns, the business owner should prioritize assuring clients about ongoing service quality under new ownership. The customer base should also have your support regarding any contractual changes and receive a dedicated point of contact for questions or support. By proactively addressing any concerns from both existing and potential customers, businesses can navigate the remaining stages of their sale more smoothly, set expectations for change, and preserve client relationships.
Best Practices for Communication
When communicating to customers about selling your business, make every effort to handle the process with sensitivity and clarity.
- Plan Ahead: Prepare a communication strategy and draft an announcement in advance of the sale. Consider your tone for each channel of communication, whether it's an email or letter mailed to customers, a phone call, or social media announcement. Prepare for common questions and concerns customers may have about the sale. Provide clear, honest answers when possible.
- Be Transparent: Communicate openly and honestly about the sale. Share relevant details about why the sale is happening and what it means for customers.
- Choose the Right Timing: Just as you would notify key employees, plan to inform customers before the sale is finalized, but once the deal is certain.
- Personalize the Message: Tailor your communication to each customer segment. Consider how the sale will impact different customer groups and address their concerns accordingly. Additionally, show appreciation for customers' support and loyalty throughout the transition process.
- Provide Reassurance: Address customer concerns proactively, and consider offering a face-to-face meeting for added buy-in to those most affected by the change. Assure customers about continuity of service, product quality, and ongoing support under the new ownership.
- Offer a Point of Contact: Provide every customer a contact with an email address and phone number so they know who to reach out to with questions.
- Follow Up: After the initial communication, follow up with customers to address any remaining questions or concerns. Keep customers updated until the point that the transition is finalized.
Special Circumstances
Navigating special circumstances demands careful management and strategic communication. When introducing news of a potential buyer, prioritize confidentiality. As with any real estate transaction, make sure all parties have signed appropriate agreements to safeguard sensitive information. Before making introductions, provide the buyer with essential background information about key customers and relationships within the sales team to facilitate a smooth transition.
Running a business while it's listed for sale requires a concerted effort to maintain focus and confidentiality. In most cases, it's advisable to keep the sale process confidential until the deal is finalized to prevent employee anxiety, maintain morale, and ensure smooth daily operations. Similarly, it's important to continue providing excellent service to customers and clients without disclosing the potential sale, as this could lead to uncertainty and potentially harm business relationships. However, in some situations, it may be necessary to inform key employees who can help facilitate the sale process. If you choose to do so, ensure they understand the importance of discretion and consider having them sign non-disclosure agreements. Develop robust transition plans to ensure seamless continuity for both employees and customers once the sale is complete, and seek guidance from professional advisors, such as business brokers or lawyers, who can help maintain confidentiality throughout the process. After the sale is finalized, clearly communicate the change to your employees and key customers, addressing their concerns and emphasizing continuity and stability to maintain trust and loyalty.
The Value of Confidentiality When Selling a Business
Confidentiality is important when you’re navigating a merger or selling a business. All communications have a potential impact on stakeholders, including customers, employees, suppliers, and competitors. Maintaining confidentiality helps protect sensitive information including financial data, customer relationships, and in some scenarios, trade secrets.
By keeping the sale process confidential, businesses can minimize disruption to operations and mitigate risks associated with premature disclosure, such as employee uncertainty or competitor interference. Confidentiality also preserves negotiating leverage and demonstrates professionalism and integrity to prospective buyers, fostering trust and increasing the likelihood of a successful transaction.
Selling a business can be a complex and delicate process, especially when it comes to communicating the sale to customers. To ensure the best possible outcome, it's wise to enlist the help of a professional business broker. Browse the BizBuySell Broker Directory to find an experienced broker who can guide you through the process and help you determine the optimal time and method for informing your customers about the sale.