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Don't forget about employee matters when buying a business

Buying a business can be a very intense and detailed-filled process. There are certain things it is very important for a business buyer to not forget about in this sometimes hectic time. Among these things are issues regarding the employees of the company they are buying. It can be very important for a business buyer to give careful thought to how the actions they take in the transition to being the new owner of the company could impact their relationship with the company's employees in the long-term and the short-term.

A company's employees play a huge part in a business' performance, and the quality of a company's employees is one of the things that may have made a buyer want to purchase a particular company.

A transition to a new business owner can raise anxieties among a company's employees. Workers may worry about a variety of things in relation to a sale of the company that employs them, including:

  • Their job security.
  • Their benefits package.
  • What will happen with the company culture.
  • What will happen with management philosophy.

Given these employee concerns and anxieties, missteps by a business buyer during employee-related aspects of the ownership transition process could have major negative implications. For example, such missteps could result in valuable employees not trusting the new ownership or deciding to leave the company.

So when buying a business, it can be important for a person to give careful thought to the company's employees and to take steps to help the ownership transition go smoothly for employees. 

Things that could help with making for a smooth transition include:

  • Carefully planning in advance the transition steps involving or touching on employees.
  • Clearly communicating with employees during the course of the transition, to prevent unpleasant surprises for employees and to keep misconceptions from arising among employees.
  • Addressing employee disputes properly. Sometimes, a business buyer will run into disputes with the business' employees while transitioning to the ownership role. How these disputes are dealt with could set a major tone moving forward and could have significant impacts on how employees view the transition as a whole and the new ownership. So when facing employee disputes, a business buyer may want the advice of a skilled business law attorney.   

Source: AllBusiness, "Buying a Business? Follow These 4 Steps to Keep Valuable Employees on Board," Richard Weinberger, Accessed March 31, 2016

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