As a Chief Financial Officer, I often get involved in exit planning.  Generally, it is not a good idea to sell your business to employees. The reasons are that employees usually do not have the financial resources to make a significant down payment nor do they have the credit capacity to assume personal guarantees that may be outstanding.  However, some business owners who have significant trust in employees are willing to take on the risk. 

Below is a preliminary checklist to consider when selling your company to employees:

• Does the potential employee buyer or buyers have as much skill as you do? Do they think like business owners or do they think like employees?
• When you retire, what skill sets that you brought to the table in the day to day running of the business need to be filled?
• Will the new employee Owner(s) have those skill sets?
• If not, what is the best way of finding someone who has the required skills and should they be hired before the sale or your retirement date to break them in?
• When should the closing date be of the new employee owner(s)?
• Does the stock ownership to employees become gradual or all at once on a retirement date and what are the income tax ramifications of each?
• How does personal liability get transferred?
• If multiple employee owners take over, will they work well together and make good partners? If not, that could spell disaster.
• How much is your business worth today?
• How much will the business likely be worth at your planned retirement date?
• How much money do you need from the business in total?
• What form can this payment take? For example, lump sum or per year for how many years? 
• How much money do you need to live on after retirement?
• What portion of that retirement amount must come from the proceeds of the sale of your business?

As previously mentioned, this is a preliminary list to think about and consider. As a CFO, I usually hand this list to the business owner when they are contemplating selling to an employee. There are many other factors that need to be carefully considered about your specific situation. Make sure you have a team of professionals helping you.