What to Say When Selling Your ISP

You've decided it's time to sell, so how do you tell your customers and staff? Or do you say nothing at all?

by Brock Henderson Principal, Henderson & Associates [July 17, 2008]

Most businesspeople tell you not to say a word until after the sale is completed. But is that the best way?

Here's the logic for not telling anyone that you are up for sale. Employees, especially key employees, are certainly going to be jittery about what will happen to them once you sell, and thus they may find employment elsewhere rather than face the uncertainty that a change in ownership will bring. That could leave you short-handed and probably make it more difficult to sell,. It could even make your business less valuable.

Also, it isn't uncommon for disgruntled employees to go to the potential buyer and bad-mouth you and the company, divulge company secrets, and provide other information which would hurt your bargaining position or even possibly destroy any opportunity to sell.

You don't tell customers because they too might get scared about what a new owner would do, and they too might switch providers, which certainly would devalue your business. Also, some energetic customers might contact the potential buyer to confirm that their current arrangements with you would continue to be honored. (And if not honored, they will be looking for a new provider.)

No potential buyer wants a bunch of your customers calling and asking how things are going to be done; they've got their own customers to take care of and don't need yours calling and whining. Also, some customers will call and ask if such-and-such is going to be fixed/resolved by the new owner, and I don't think you want a potential buyer saddled with doubts about the company they are considering buying.

Simply put, the more people that know your business is for sale, the more likely it is for something to go wrong and sabotage the sale, or at least hurt the value of your company. Thus the conventional business wisdom is to keep your mouth shut, and don't tell anyone that you are selling.

On the other hand
However, there are always at least two sides to any discussion, so here is why it makes sense to announce your intention to sell.

It was your employees and customers that made you the success you are, and frankly they are your partners in the success of your business. As partners they deserve to know the truth. Some employees and customers will leave, but if you have dealt openly and fairly with them in the past I think you will be all right.

Also, by announcing your intentions to sell, you have increased the number of potential buyers. You never know when a related business (networking company, web developer, computer repair business) or even a non-techie businessperson might want to get into the ISP business. By making it known to the general population that you want to sell, you open the doors of opportunity to a much larger group of potential buyers.

True, the most likely buyer will be another ISP, but there is no sense in restricting your selling opportunity to just ISPs; let employees, customers, competitors, related industry businesses, and the general public know that you are looking to sell. You never know who might be interested until you've opened up.

—End