Do I need my key employees on side before I start planning an exit?

Not before you start planning — early planning can happen quietly, without involving anyone else at all. But before you go to market with buyers, having your key employees genuinely on side matters a great deal, because buyers will want to know whether the people who actually run the business day to day are likely to stay after closing, and an uncertain or resentful key employee is a real risk factor in their eyes.

The nuance is timing the conversation carefully. Telling key employees too early, before you've decided anything concrete, risks unsettling them or having word spread further than you intended; waiting until a buyer is already asking questions can look like you were hiding something, or leave employees feeling blindsided at exactly the moment their cooperation matters most. Many owners find a middle point — bringing in one or two of the most critical people once a sale is genuinely likely, under confidentiality — works better than either extreme.

Retention arrangements, whether a bonus tied to closing or a role with the new owner, can also help align a key employee's interests with the sale succeeding. A business lawyer can help you plan both the timing of disclosure and any retention terms.