How Key Employees Can Make or Break Your Business Sale

Business owner telling his employees that he is selling his business

How Key Employees Can Make or Break Your Business Sale

One of the more challenging moments in a sale can come when a buyer says, “I need to speak with your key employee before I continue.”

This exact scenario happened when I was selling a therapy business. The key employee didn’t know the business was for sale. But since we wanted to move forward with this particular buyer, we agreed to the meeting. The meeting went well—both the buyer and the employee gave positive feedback.

Then came the twist. The employee realized just how essential she was to the business and demanded a raise—from $70,000 to $105,000. Negotiations between the buyer and seller broke down over who would cover the increase. The deal collapsed. The buyer walked, and the key employee quit.

So, what’s the best strategy for telling employees you’re selling?

Many owners lean toward secrecy until everything is finalized and the money is in the bank. It feels safe. But is it smart?

Have a Communication Plan

Once you decide to sell, create a thoughtful communication strategy for your employees. If you do share news during the process, start only with key employees.

First, ask yourself: Could any of them be a potential buyer?

Too many owners dismiss this idea, assuming employees don’t have the financial means. But with SBA financing, a buyer can purchase a business with as little as 10% down—making it more accessible than you might think.

Even if they’re not interested or don’t qualify, employees will appreciate being considered. In one deal, we helped a key employee explore SBA financing. They didn’t qualify, but instead of feeling overlooked, they became a valuable advocate during the sale—assisting in buyer meetings and supporting due diligence efforts.

In another case, a seller ignored a key employee who believed they should’ve had the chance to buy. After the sale, that employee recruited four co-workers and launched a competing company.

Lesson learned: Don’t underestimate key employees or their potential impact.

Protect the Process with NDAs

Before you speak with any employees about your plans—especially key ones—have them sign a non-disclosure agreement (NDA). This protects both your business and the deal.

Consider a “Stay Bonus”

If you do decide to loop in key employees, show your appreciation and protect the transition by offering a stay bonus. This can be structured in two parts: one payment if they remain six months, and a second after one year.

Buyers love seeing this in place—it helps ensure continuity, and it’s a meaningful way to thank the people who helped build your business.

In the therapy business sale I mentioned earlier, I suggested a stay bonus. The seller declined. Had she offered one, the deal may have closed successfully.

Announcing the Sale to All Employees

Once the deal is signed and finalized, gather your team to make the official announcement and introduce the buyer.

I still remember doing this when I sold my own business—it’s an emotional moment. When you first say, “I’ve sold the business,” expect a wave of concern and uncertainty. For the next 30–60 seconds, your employees may not even hear your words as their minds race with questions about job security and the future. Be ready to repeat yourself and provide reassurance.

Your People Are the Heart of the Deal

Buyers consider many factors when acquiring a business, but one of the most important is the team they’re inheriting. The smoother the employee transition, the smoother the sale.

So, whether you’re considering a sale now or down the road, start thinking about how—and when—you’ll communicate with your team. Your people can either help close the deal or unintentionally derail it.