OnwardLearn · Selling · Step 4. Know what buyers value most
Your team, and whether they stay
The short version
- Buyers are buying your people as much as your equipment.
- They want to know who the key employees are and whether those employees will stay.
- Tenure, fair pay, written roles and people who can lead without you all raise confidence.
- Some owners use stay bonuses to keep key people through a sale. Your attorney can help set one up.
Why the team matters to a buyer
A new owner cannot run the business alone on day one. They need the people who know the customers, the equipment and the work. If key people leave soon after closing, the earnings the buyer paid for can leave with them.
What buyers look at
- Key people. Who the business could not run without, and what each one does.
- Tenure. How long people have been with you.
- Pay. Whether wages are in line with the market. Pay well below market may not last under a new owner.
- Licenses and certifications held by employees that the business needs.
- A second layer. Whether someone besides you can lead day to day.
- Agreements. Any employment agreements, non-competes or promises of future pay or ownership.
Keeping key people through a sale
Some owners offer stay bonuses, also called retention bonuses. A key employee receives a payment for staying a set period after closing. Who pays for it, you or the buyer, is part of the negotiation.
Any promise you have made about future ownership or bonuses needs to be in writing and reviewed by your M&A attorney. An unwritten promise can surface at the worst time.
When to tell your team
Most owners tell only a few key people before closing, and only when necessary. Lesson 5.7 covers who finds out and when. Lesson 10.1 covers telling everyone.
When you are ready to talk to someone
Nobody needs to know you read this. When you are ready, these are the questions to bring.
- For your M&A attorney: "Have I made any promises to employees, written or spoken, that a buyer would need to know about?" Listen for: questions about bonuses, ownership and agreements, and how each would be handled in the sale.
- For your M&A attorney: "How would a stay bonus for my key people work, and who should pay for it?" Listen for: options, costs and how it would be written.
- For your accountant: "How does my pay for key roles compare to the market?" Listen for: a comparison a buyer would accept, and what it would mean for earnings if pay had to rise.
When you’re ready
How a sale actually happens, in plain language — before you decide anything. Make a free account — nothing is shared