I employ 10 people who consider me family - how should I tell them I want to sell my business?

I employ 10 people who have been with me from the early days of the business and consider me family. 

Now I want to sell up – how honest should I be with them?

Catrin Mills, employment partner at law firm Sharpe Pritchard, said: With a small business and longstanding employees who may have been with you from the beginning, it would be understandable if you wanted to be open with them about something as significant as a possible sale. 

They have helped you build the business and, particularly where the relationship feels more like family than employer and employee, keeping them in the dark may feel uncomfortable.

The key is to strike the right balance. You will want to be honest with loyal employees when appropriate, but telling them too early, when plans may still change or fall through, could cause unnecessary stress and uncertainty. 

You also need to take account of any confidentiality obligations surrounding the sale.

How should small business owners tell their staff they want to sell the firm? 

You should consider carefully when you share information and how much you can sensibly say at each stage.

One important consideration is ‘TUPE’, or the Transfer of Undertakings (Protection of Employment) Regulations, which may apply depending on how the business is sold.

In simple terms, TUPE is designed to protect employees when the business they work for changes hands. If it applies, their employment will generally transfer automatically to the buyer, preserving their continuity of service and existing employment rights.

There are also specific obligations on the employers involved to provide affected employees with information about a transfer and, where changes affecting them are proposed, consultation obligations may arise. 

It’s important to take legal advice on what you need to do in these circumstances.

So, when the time is right, speak to them personally but avoid making promises about job security or future arrangements that ultimately depend on the buyer.

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