What a HR Expert Would Want You to Think About Well Before Selling your business

With expert contribution from Paulette Kolarz GAICD, BespokeHR

Selling a business is more than a financial transaction. It’s a transition of people, culture, leadership, relationships and accumulated knowledge — much of it built over years of trade. Most owners naturally focus on the commercial preparation: tidying financials, updating contracts, reviewing customer terms and clarifying the structure of a deal.

These are important foundations, but the people and culture components often determine how smooth — or how stressful — the process becomes. To broaden the perspective for owners planning ahead, I asked expert HR consultant Paulette Kolarz GAICD from BespokeHR what she believes business owners should consider early, well before a future sale.

Her overarching message was clear: Stabilise, tidy and strengthen your people and culture foundations early. These elements quietly shape buyer confidence, team stability and ultimately the transferability and value of the business.

Below is a guide to 7 key areas for consideration, as recommended by Paulette:

1. Understand the Real State of Your Culture

Culture is not a poster on the wall — it is how the business feels on an ordinary Tuesday when no one is watching. Buyers will pick up on any hotspots quickly. Before preparing for a sale, consider:

• Is the team generally calm or tense?

• Are there known issues that haven’t been addressed?

• Does the leadership group feel aligned and connected to the business direction?

• Are roles and expectations clear?

Buyers often ask to meet the leadership team. What they are looking for is not perfection — it’s cohesion, stability and capability. If there are cultural cracks, deal with them early. They are harder (and a lot more complex) to fix mid‑sale.

2. Ensure HR Foundations Are Tidy, Up to Date and Compliant

Strong HR systems signal that the business is well‑run and low risk. Weak systems can raise red flags, even when the financials are excellent. Areas to review include:

• Employment contracts — updated within the last 12 months, consistent, and aligned with actual job roles

• Position descriptions — accurate and current Policies and procedures — reflective of how the business operates today, particularly around conduct, safety, grievance and digital behaviour

• Leave balances — manageable, with a plan to reduce excessive accruals

• Workers compensation and injury history — clear and well‑documented

• Psychosocial safety processes — reflective of current

• WHS requirements Risk and WHS systems — consistent, properly recorded, and accessible

As a side bar - having good HR foundations is good business practice whether or not you are selling!

3. Reduce Key‑Person Risk — Including Your Own

Every SME has people who carry disproportionate knowledge, relationships and operational history. In many cases, the owner is one of them (speaking from experience!). Key‑person dependency can be a major risk factor for buyers. Practical steps to manage this include:

• Mapping single-point sensitivities

• Documenting operational processes and workflows

• Sharing knowledge deliberately across the team

• Coaching successors or building leadership depth

A transferable business is far more valuable (and far more enjoyable to run in the interim).

4. Consider Communication Carefully

Communication during a potential sale is one of the most delicate parts of the process. There is a balance between confidentiality and respecting your team. Think about:

• Who needs to know and when

• How to maintain psychological safety through change

• How leaders will answer questions consistently

• What the rhythm of communication should be

An unsettled team creates buyer uncertainty whereas a steady, informed team signals maturity and resilience.

5. Strengthen Leadership Capability and Decision‑Making

A buyer is not only buying your business — they are buying the team’s ability to run it without you. Strong leadership depth is a significant asset and you need to review your leadership group with clear eyes:

• If you have leaders in your business are they confident decision‑makers?

• Do they take accountability?

• Are they developing others?

• Have they had meaningful training or support recently?

If there is time before a sale, investing in leadership capability delivers value well beyond the transaction.

6. Make the Employee Experience Predictable from Entry to Exit

Buyers look for repeatability and they want to see that the way you recruit, onboard, develop and exit people is consistent across the business. Consider reviewing:

• Onboarding processes

• Feedback and engagement mechanisms

• Performance and development pathways

• Exit processes and documentation

7. Plan Carefully for the Transition Period

Most sales involve some form of handover, whether weeks or months (or even years). Consider how you will:

• Transfer knowledge to the buyer Introduce the buyer to the team and clients

• Maintain stability during change

• Define decision-making authority during the handover

• Support leaders through uncertainty

A smooth transition is one of the strongest indicators of a healthy, resilient business but it will not happen without careful and considered planning.

The People Side: Risk and Value The people side of a business is often where risk sits but it can also be where hidden value lives. Strong culture, stable leadership, clear communication and well‑organised HR foundations tell a story that buyers notice immediately.

These elements sit alongside financial performance as core indicators of a well‑run, transferable business. Planning well ahead gives you options, confidence and far more control over the journey.

Thank you to Paulette Kolarz GAICD and the BespokeHR team for their expert insight. You can find out more about their services at www.bespokehr.com.au or connect with Paulette here https://www.linkedin.com/in/paulettekolarz/