Few decisions in the exit process are as delicate — or as misunderstood — as when to tell your team you’re selling the business.
On one hand, you want to be transparent. Your employees have been part of the journey, and you owe them honesty. On the other hand, premature disclosure can create anxiety, speculation, and even turnover before anything is finalized.
Striking that balance between transparency and confidentiality is one of the hardest parts of preparing for a sale. But done right, it can actually build trust, protect morale, and make the transition smoother for everyone involved.
At Legacy Advisors, we help founders navigate this exact challenge — how to communicate strategically, maintain control of the narrative, and preserve business performance all the way through closing.
The Founder’s Dilemma
You can’t sell your company in total secrecy forever. At some point, your leadership team — and eventually the rest of your employees — will need to know. The real question isn’t if you tell them, but when and how.
Founders tend to fall into one of two traps:
- They tell the team too early. This can create panic, rumors, or distractions that affect performance.
- They wait too long. This erodes trust and makes employees feel blindsided once the news breaks.
The key is timing and message control — making sure you share the right information, at the right time, with the right people.
Why Communication Matters
Buyers aren’t just acquiring your assets and contracts; they’re acquiring your people. If employees are caught off guard or disengaged during diligence, it raises red flags. Turnover, gossip, or internal confusion can reduce morale and even spook potential buyers.
Transparent, well-timed communication builds stability. It helps employees understand the “why” behind the sale — growth, opportunity, or strategic alignment — instead of assuming the worst.
In The Entrepreneur’s Exit Playbook, I talk about how leadership during an exit is as much about emotional intelligence as it is about deal strategy. Managing morale is part of managing value.
When to Tell Your Leadership Team
Your leadership team should be the first to know — but only when you have a credible reason to share. That typically means you’ve decided to explore a sale seriously or you’re close to engaging advisors.
Bring them in under strict confidentiality. Their buy-in will be essential to maintaining operations, managing diligence, and supporting messaging when the broader team eventually finds out.
Early involvement also helps leadership feel respected and included in the process — which reduces uncertainty and ensures they act as allies, not skeptics.
When to Tell the Broader Team
For the rest of your employees, timing depends on the progress and certainty of the deal. In most cases, the ideal moment is after signing a letter of intent (LOI) but before due diligence ramps up publicly.
By this stage, the deal is real enough to discuss, but not so early that details can shift dramatically. Announce it with clarity and optimism. Emphasize that the transition is strategic, that their roles are secure, and that the buyer values your team’s contributions.
If your management team is aligned beforehand, they can help reinforce that message company-wide.
How to Communicate the News
Here’s how to share the news in a way that minimizes fear and maximizes trust:
- Lead with purpose. Explain why the sale is happening — growth, opportunity, or new investment.
- Be transparent, but measured. Don’t speculate about terms or timelines. Share only what’s confirmed.
- Acknowledge emotions. Recognize that employees may feel anxious or uncertain. Empathy matters.
- Highlight opportunity. Focus on what the buyer brings — stability, resources, or career advancement.
- Keep communication open. Encourage questions and provide regular updates as the process unfolds.
When handled thoughtfully, communication becomes an act of leadership, not just disclosure.
Lessons From Experience
When I sold Pepperjam, we faced this exact decision. I chose to inform my leadership team early, but waited to announce the sale to the broader company until the deal was nearly finalized. That timing preserved morale and kept everyone focused on performance.
On the Legacy Advisors Podcast (https://legacyadvisors.io/podcast/), Ed and I have shared stories from founders who made the opposite choice — some too early, some too late. In both cases, uncertainty spread faster than facts. The companies that handled it best were the ones that had a clear communication plan from day one.
The Valuation Connection
You might not think of communication as part of valuation — but it is. Buyers evaluate not just numbers, but organizational health. If they sense confusion, distrust, or turnover risk, they’ll discount accordingly.
Clear, confident communication signals maturity and control. It tells buyers your team is stable, informed, and ready for transition — which can help protect or even enhance deal value.
Final Thoughts
Telling your team you’re planning to sell is never easy, but it’s also not something to fear. When done at the right time and with the right message, it becomes an opportunity to strengthen trust and reinforce culture.
Exits don’t happen when you feel ready — they happen when your business is ready. And readiness includes a team that’s informed, aligned, and confident about the future.
Find the Right Partner to Help Sell Your Business
At Legacy Advisors, we help founders navigate every stage of the exit process — including when and how to communicate with employees.
Visit legacyadvisors.io to connect with our team, listen to the Legacy Advisors Podcast (https://legacyadvisors.io/podcast/), and explore insights from The Entrepreneur’s Exit Playbook. Together, we’ll make sure your exit strategy builds value — not anxiety.
Frequently Asked Questions About Communicating a Business Sale to Your Team
When is the right time to tell your employees you’re planning to sell?
The best time to share the news depends on your deal’s stage and your company’s culture, but in most cases, the ideal time is after you’ve signed a Letter of Intent (LOI) and are entering formal due diligence. By then, the deal is real enough to justify communication but not so early that it could create unnecessary speculation or panic. Founders should inform their leadership team earlier under confidentiality, then plan a coordinated announcement once details are firm. Timing is everything — tell them too soon and you risk distraction; tell them too late and you risk losing trust.
Should I tell my leadership team before the rest of the company?
Yes. Your leadership team plays a critical role in maintaining operations, managing morale, and preparing for diligence. Bringing them in early — under strict confidentiality agreements — allows them to help you plan and deliver the message to the rest of the company. When leaders feel informed and included, they act as stabilizing forces. When they’re blindsided, they can unintentionally fuel rumors or resistance. Early leadership alignment is one of the most important predictors of a smooth transition.
What should I say when I tell employees the company is being sold?
Lead with honesty, optimism, and empathy. Explain why the sale is happening — perhaps it’s to access new growth capital, expand opportunities, or provide greater stability. Reassure your team about job security and highlight the buyer’s commitment to continuity. Avoid speculation about specific deal terms or timelines, and make space for questions. The message should be consistent across departments: this transition is strategic, well-planned, and designed to benefit both the company and its people.
What are the risks of telling the team too early?
Sharing too soon can lead to distraction, anxiety, and even attrition. Employees may worry about layoffs, leadership changes, or cultural shifts before any of those details are known. That uncertainty can impact productivity and morale — or worse, word may leak to customers, vendors, or competitors. Until a deal is credible and structured, it’s usually best to keep information limited to senior leadership and advisors. The key is to communicate once there’s clarity, not while there’s chaos.
How can Legacy Advisors help me manage communication during a sale?
At Legacy Advisors, we coach founders on how to balance confidentiality and transparency during the exit process. We help develop communication plans that align with deal milestones, protect morale, and maintain control of the narrative. Drawing insights from The Entrepreneur’s Exit Playbook and stories shared on the Legacy Advisors Podcast (https://legacyadvisors.io/podcast/), we ensure you communicate effectively with your leadership team, employees, and even buyers. The right communication strategy doesn’t just protect your people — it protects your valuation.