Selling a healthcare business is a complex and strategic process, and one of the most common concerns owners have is when they should inform staff of the sale. While transparency is often valued in business operations, discretion is typically the best approach when it comes to selling a company.
Why Keeping A Prospective Sale Confidential is Important
In most cases, we strongly advise against informing your staff about a potential sale too early in the process. Premature disclosure can lead to uncertainty, anxiety, and even unintended disruptions in daily operations. Employees may begin searching for other jobs, key staff members could leave, and patient confidence may waver if word spreads before a deal is finalized. Most importantly, a prospective sale is just that, a prospect not a guarantee. There is no need to inform your staff of a transaction that has yet to be determined if it will in fact finalize.
Maintaining confidentiality helps ensure that your business continues running smoothly, retaining its value and appeal to prospective buyers.
When Should You Inform Key Staff Members?
While it’s best to keep the sale confidential from most employees, there are circumstances where involving certain key staff members can be beneficial. If you have trusted managers or leadership team members who can provide essential operational or financial information during due diligence, it may make sense to include them on a need-to-know basis.
If you do decide to bring key individuals into the process, it’s critical to:
- Ensure they understand the importance of confidentiality.
- Clearly define their role in assisting with due diligence and data gathering.
- Provide reassurance about their job security and the company’s future to prevent unnecessary panic.
When is the Right Time to Inform Staff of the Sale?
In most cases, employees are informed after the Purchase Agreement has been signed but prior to the official close (if the closing date is staggered from the signing of definitive agreements). At this stage, the sale is nearly finalized, and there is a clear transition plan in place. This timing allows for a smoother handover, ensuring staff feel supported while minimizing uncertainty. Additionally, in many cases, this also allows for the buyer to be present to further calm any uncertainties that may arise with new ownership in place or answer any questions about the future of the business.
The Bottom Line
Selling a healthcare business requires careful planning and discretion. While it may be tempting to inform your staff of the sale early on, doing so can create unnecessary challenges. The safest approach is to keep the sale confidential until you are confident in the transaction’s success after the signing of the definitive agreements. However, if you have key employees who can aid in the process, selectively including them in the sale process may provide strategic advantages.
If you’re considering selling your healthcare business, M&A Healthcare Advisors can guide you through every step to ensure a smooth and successful sale. Contact us today to discuss your options and create a strategic plan that maximizes your business’s value while maintaining stability.
