This is one of the most stressful questions sellers wrestle with. On one hand: your staff are loyal, you don't want to be deceptive, and they deserve to know. On the other: telling early can wreck your sale and damage the very people you're trying to protect.
The honest broker advice: tell staff once contracts are exchanged, not before. Here's why.
Why telling early backfires
1. Top performers leave
When staff hear "the business is for sale," they hear "my future is uncertain." The strongest performers — the ones with options — start interviewing within weeks. By the time the sale completes, your best people are gone, and the business buyer just bought a hollow shell.
2. Customers find out
Staff talk. Casually, accidentally, sometimes deliberately. Within 2–3 weeks of telling staff, expect at least one customer to call asking "are you really selling?" Customer departures during a sale process can crash the financials right when buyers are looking at them.
3. Competitors get a window
Once it's in the rumour mill, competitors know to push harder on your customers, your supplier relationships, and your staff. Some will try to acquire you (good outcome — sometimes). Others will try to wound you. Either way, your negotiating position weakens.
4. The deal can fall through
Most business sales have a 30–60 day due diligence period during which the deal can collapse. If staff already know and the deal falls over, you're left running a business where everyone knows you tried (and failed) to leave. Painful and value-destroying.
When to tell who
| Stage | Who knows | Why |
|---|---|---|
| Pre-listing | You + spouse + accountant + lawyer + broker | Need-to-know basis for sale prep |
| Active marketing | Above + maybe 1 trusted senior employee | Only if you genuinely cannot run sale process alone |
| Buyer due diligence | Above + maybe finance/operations lead under NDA | Some access may be needed to historical data |
| Contracts exchanged | Senior team | Pre-settlement period needs operational continuity |
| 1 week before settlement | Whole team | Personal announcement before public/customer facing |
| Settlement day | Customers + suppliers + public | New owner introduces themselves |
The trusted senior employee exception
Sometimes you genuinely can't run a sale process alone — you need a senior team member helping with financials, operational documentation, or buyer site visits. In that case:
- Make them the first person you tell, not the last. Frame it as a position of trust, not a Friday afternoon afterthought.
- Get a signed confidentiality agreement. Specific to the sale, not a generic employment NDA.
- Discuss their post-sale future explicitly. Most buyers want to retain key staff. If you can offer some kind of retention bonus contingent on settlement, this aligns interests powerfully.
- Pick the right person. Loyalty matters more than seniority. The staff member with 10 years tenure who's clearly your right hand is usually the right call. The 6-month finance manager who's been agitating for a raise is not.
Maintaining confidentiality without lying
Staff will notice things during a sale process — buyer visits, unfamiliar advisors, time you're spending out of the business. You don't need to lie. Honest cover stories include:
- "I'm looking at acquiring another business" — true if you're considering reinvestment
- "We're doing a strategic review with consultants" — true if you have a broker
- "I'm exploring a banking refinance" — true if there's any debt restructuring involved
- "We're modeling some growth scenarios" — true if you're working on the IM
Outright lies (e.g. "no, we're definitely not selling") are corrosive — and they make the eventual conversation worse. Stick to vague-but-true language.
Wrestling with this decision?
Free 15-minute call. I'll talk through your specific situation — staff dynamics, timeline, who needs to know — and help you plan the sequence.
Talk to Clinton →How to actually tell them when the time comes
- Tell them yourself, in person, before customers. Don't outsource it to the new owner.
- Frame it positively. "I've sold the business to [X], who shares our values and wants to grow it." Not "I'm getting out."
- Address their two main concerns immediately. Will I keep my job? Will my pay/conditions change?
- Have the new owner present for the announcement, or scheduled to meet the team within 48 hours.
- Acknowledge it'll feel weird. "I know this is a lot. I'll be around for [transition period] to support the handover."
Legal and practical obligations
- Award/EBA notification: Most awards require notice of significant changes affecting employment. Specifics depend on the award.
- Transfer of employment: Under the Fair Work Act, employees can transfer with the business. Their service, leave entitlements, and conditions usually carry over.
- Redundancy obligations: If the new owner doesn't take certain employees, redundancy may apply. Plan and budget for this.
- Long service leave: WA has specific transfer-of-business provisions. Check with HR or a workplace lawyer.
None of this is exotic — but it's worth a 30-minute call with a workplace lawyer to make sure your sale agreement properly handles staff entitlements. Cheap insurance for a major transaction.