You hear a lot in the media about “big business” and how business owners are selfish and do not care about their employees. But is it really true?
I’ve been working directly with business owners for most of my career… helping them with their businesses’ legal issues, helping them buy or sell their business or commercial real estate, and now advising clients on their financial matters. I have seen a consistent theme throughout my career with almost all business owners… they really care about their businesses AND their employees! One of the most common questions I would hear from a business owner who was thinking of selling their business was this: “What will happen to my employees? Will they lose their jobs? I want to make sure they can keep their jobs.” I’ve even seen business owners who were selling their business decide to share some of the profit of the sale with their long time employees, even though they had no legal obligation to do so!
In most cases during the sale of a small to medium sized business, the employees are all retained during a sale. There are two reasons for this. The first is that the business owner tries to make it a part of the deal. The second reason is that usually the bank for the buyer does not want the new buyer to make a lot of changes. They are lending on a known commodity… the experience, the earnings, the face of the current business. Making changes to personnel or changing things that customers see, such as the name of the business, the location, or the employees who get the work done, can create problems and cause a business to lose customers, affecting the bottom line and jeopardizing the bank’s loan and the borrowers’ ability to pay.
The reality is that although the business owners usually try their best to protect employees during a sale, the sad thing is, these things are usually done in confidence and never get in the news, nor are the employees told about this during a sale. They have no idea that their boss really cares about their welfare, has tried to look out for them and protect them during the sales process.
Sometimes business owners get a bad rap. I can attest to the fact that usually, the opposite is the case.
Anne Sawasky
Business Succession Planning Consultant
Investor Coach
Chief Compliance Officer
