You’re a business owner who has now decided your commercial venture warrants a sale.
Perhaps you experienced a significant upturn in presence or profitability during Covid, and now the time is right to pivot from that fortunate position?
Or maybe, you’ve been the hands-on owner of a well nurtured family business which has worked its way through three generations – and now you’re the one who is charged with passing it on to a new custodian?
Whatever the reason for seeking a business sale, HR considerations really must be fundamental.
While many business owners might jump to thinking about the likely profit margin on a sale, or how they potentially extricate themselves from building premises or machinery overheads, it really is a number one priority to consider your people.
You wouldn’t sell your home without considering the implications on your family members or housemates, so why would you neglect to diligently assess who and how your loyal employees will be affected.
First, you’re going to want to prepare for the inevitable due diligence.
Your buyer may know something of your business or your sector more broadly, but even so, they’re going to want to scrutinise the structure of your team, their employment status, and the roles they play in terms of your existing objectives (which, of course, may well be different to what the future buyer intends).
Take the required time to collate and clarify all information which your buyer is likely to need in respect of each and every employee, contractor or consultant.
Of course, there is a significant distinction in this aspect of your sale process, and that depends chiefly on whether you will be carrying out a ‘share’ sale (in which case, the employer is not changing) and ‘asset’ sale (TUPE will apply because staff will need to be ‘transferred’ in the process).
TUPE (Transfer of Undertakings – Protection of Employment) protects the rights and conditions of work for all your existing staff.
While it is right that in both a share sale and an asset sale, the future buyer will want details of all employees, this is even more detailed and important in the latter case.
As part of TUPE, you’ll need to create thorough Employee Liability Information (ELI), and this has to be provided 28 days prior to the business transfer.
Relevant information to be provided for this procedure, includes:
While these are the more ‘compulsory’ elements of the process, some purchasers might rightly want more detail, such as:
Naturally, providing all of this information means offering a potential purchaser a great deal of deeply personal detail, so there are ways of doing this in such a manner as to keep employees ‘anonymous’ during the process and maintain your obligations in accordance with GDPR.
It should also fall onto your list of considerations to plan carefully and empathetically for how you will communicate to all staff about your intention to sell.
This is something which is always better coming from you directly, so prepare accordingly.
NEED HELP WITH STARTING THE PROCESS?
If you’re a business owner in the East of England, and you’re currently debating putting your business up for sale, or you’re midway through the process, we would love to help.
We can help you consider your options, increase the value of your business through your people, and explore how you maintain your personal and commercial reputation and future interests at all times.
MAD-HR are a team of HR professionals handpicked for their proven ability to increase revenue and reduce costs. Feel free to reach out to see how we can make a difference in your business.