When Do Employees Find Out About A Business Sale?

Are you an owner / future seller? Check out our 2025 Seller Guide for what to expect

Are you a prospective buyer? Do not miss Straight Talk for Buyers

Now – let’s get to it!

First, a refresher on Confidentiality

If you look at any business or owner we are working with on this site, or any of the numerous business for sale platforms, you will never see a business or owner name mentioned.

We will always use descriptions like:

“This King County, WA electrical business had $5.7M in 2024 revenue, adjusted owner cash flow of $865k, established 30+ years ago, 15+ employees, etc etc.

To learn more, complete and submit a non-disclosure agreement (NDA). After your NDA has been reviewed and verified, we will release a confidential marketing document with much more information on the opportunity.”

This is our standard process with prospective buyers. This process, along with back-end infrastructure and systems, is designed to protect confidentiality.

After the buyer has received these confidential marketing materials; the conversation really starts as we evaluate their interest, potential fit, and financial capacity.

So, what about my employees?

In the vast majority of small & medium business sales, employees do NOT find out about a business sale until AFTER the transaction has closed.

As a rule of thumb, it would be unusual for employees to be informed of a sale prior to closing if the transaction size is $5M or less.

There are several important reasons for this. Naturally, we do not want your employees to angle for increases in compensation before a sale, special bonuses, or other favorable treatment. We also do not want to give employees any unneeded motivation to look for employment elsewhere. Beyond this though, news of a potential sale can be quite distracting for all, and may have unintended consequences when your employees are dealing with customers or suppliers.

An important caveat: for larger deals (~$10M+ in transaction size) it is normal for key employees to be notified before a transaction is closed. This ensures that management is prepared to maintain steady leadership through the sale and ensure continuity of operations, financial results, and team leadership.

We generally advise adhering to these guidelines unless the circumstances with a seller, business, or buyer are truly unique.

Hopefully, you are a little smarter on confidentiality and when employees do / not learn about a business sale.

As always, thank you for reading.  

At Washington Business Brokers we are experts in valuation, optimizing a business for sale, buyer identification and qualification, negotiation, deal structuring, and closing.

If you would like to better understand the value of your business or learn more about the process of confidentially selling:

call or text 206.703.3555
email info@wabusinessbrokers.com
or schedule time for an exploratory, free consult

100% confidential, always.

When the time is right for you, we will be proud to partner and advise on your fair deal.