The human side of exiting: managing employees and stakeholder expectations

This is part of the series, “Sell your business tomorrow,” which is designed to guide leaders through the critical steps required to exit their business successfully on their own terms. From building a scalable business and preparing for due diligence to understanding legal structures and optimizing tax outcomes, each installment provides practical insights and actionable strategies to ensure a smooth, profitable, and strategic exit.

Exiting a business isn’t just about closing the deal. It’s also about managing relationships, maintaining morale, and preparing your team for the changes ahead. This part of the process is often overlooked, but it’s vital for ensuring a smooth transition that doesn’t destabilize the company.

In this installment of our founder-focused series, we’ll unpack what it takes to ensure your team is ready and resilient enough to support a strong exit.

Employees are often the most impacted by an exit. Whether it’s concerns about job security, changes in company culture, or uncertainty about future leadership, their emotions and expectations should be thoughtfully managed.

How to handle it: Start by communicating early and often. Transparency is key. Address employee concerns proactively and inform them of how the sale or transition might impact their role. Create a plan for managing any changes in roles, responsibilities, and leadership. 

Recommended reading: From founder to future: Institutionalizing wisdom without killing culture

Your leadership team is responsible for executing the transition, but they may have their own concerns about the future. If they aren’t fully aligned with the direction of the exit, it could lead to confusion or instability at the top.

How to handle it: Involve your leadership team early in the exit process. Provide them with clear expectations, a vision for the future, and transparency around the reasons for the exit. Encourage open dialogue and ensure they feel supported in their roles during the transition. If possible, help them with their own planning for the post-exit environment; this might include new leadership opportunities or roles within the new structure.

Venture capitalists, investors, board members, and other key stakeholders have a vested interest in the exit. Aligning their expectations with your goals is essential to avoid misunderstandings or dissatisfaction with the final outcome.

How to handle it: Clearly communicate your goals, timeline, and any potential changes to stakeholders. Keep them informed throughout the exit process and ensure they understand the rationale behind your decisions. Regular updates and discussions about the sale process or the transition help maintain confidence and support from key stakeholders. Address any concerns or objections early to avoid surprises.

Recommended reading: Planning a business exit? Prioritize preparedness over potential buyers

One of the most significant concerns when exiting a business is the potential for cultural shifts, primarily if a new owner acquires the company. Culture can easily be disrupted if the new leadership doesn’t align with your company’s values or if employees feel disconnected from the new direction.

How to handle it: Work with the new owner or buyer to ensure there is a shared understanding of the company culture. If possible, facilitate a meeting between your team and the new leadership to help bridge any gaps that may exist. If you’re selling to a larger entity, help your team understand how they fit into the broader vision. This transparency will help ease transitions and foster a sense of continuity.

Exiting a business can create a sense of loss, especially if the company has been a big part of your identity for years. The emotional toll of selling is significant, not only for the founder but also for employees and other stakeholders. Many founders and leaders who helped shape the company struggle with feelings of loss, guilt, or uncertainty about the future during and after the process.

How to handle it: Acknowledge the emotional side of the exit for both yourself and your team before it becomes a roadblock. It’s critical to process your feelings and seek support from mentors, peers, or professional advisors to avoid damaging the sale. Offer a clear vision for the future and be open to feedback from your team.

Key employees, such as senior managers or department heads, may feel uncertain about their role post-exit. If not managed properly, this uncertainty could lead to attrition or loss of talent.

How to handle  it: Before the exit, work with key employees to outline their potential future roles and responsibilities within the company. Create retention plans or offer incentives for employees to stay with the company through the transition period. For those interested in staying on after the exit, discuss potential leadership opportunities or paths within the new organization. This clarity will help retain your top talent and ease any concerns about their future.

Recommended reading: Clarity beats control: designing teams that don’t rely on constant oversight

Customers and clients are often deeply invested in the company, and any changes in ownership or leadership can cause anxiety about the continuity of products, services, or relationships.

How to handle it: Keep your customers informed about the changes and provide assurance that the quality of service will not be disrupted. Personalize communications, and offer them a direct line to leadership if they have questions or concerns. If the sale involves a shift in direction or offerings, be clear about how it will impact them and highlight the benefits of the new ownership. Reassuring clients and customers that their interests will be well taken care of is essential for maintaining loyalty and trust.

Recommended reading: Why you should run your business like you’re selling it tomorrow

The people side of a business exit is often the most challenging, yet imperative, to success. By managing the expectations of employees, leadership teams, stakeholders, and customers, you can create a smooth transition that ensures business continuity and retains the value of what you’ve built. Remember that your exit is not just about the sale; it’s about leaving a legacy, maintaining relationships, and ensuring that your departure strengthens the foundation you’ve laid for future growth.