A business is really just a collection of systems, assets, and people that are coordinated to work together to create and deliver products and services. It’s fairly common for small and lower mid-market businesses not to have written systems, where people simply know how to do things, with the only written policies and procedures being those associated with legal compliance and employment. However, businesses that have written policies and procedures for all aspects of their business, including detailed instructions of how to do specific employee tasks and jobs, will generally find that their businesses are significantly more marketable and potentially more valuable.
A buyer will be more confident of a smooth transition and the ability to continue to successfully operate the business if they know there are detailed procedures for all aspects of running the business. If your business doesn’t have detailed written policies and procedures, it may seem like a daunting task to create them. Enlisting employees to document their particular jobs and tasks will make this far more manageable. Not having detailed written policies and procedures is one of the biggest missed opportunities for potentially increasing the value and marketability of a business. Doing this may also help you achieve better terms while not requiring as much time for due diligence, training, and transition. A few books that may be helpful for creating better systems include: “E-Myth Mastery” by Michael Gerber, “Work The System” by Sam Carpenter, and “The Toyota Way” by Jeffrey Liker. See below:
A buyer will be more confident of a smooth transition and the ability to continue to successfully operate the business if they know there are detailed procedures for all aspects of running the business. If your business doesn’t have detailed written policies and procedures, it may seem like a daunting task to create them. Enlisting employees to document their particular jobs and tasks will make this far more manageable. Not having detailed written policies and procedures is one of the biggest missed opportunities for potentially increasing the value and marketability of a business. Doing this may also help you achieve better terms while not requiring as much time for due diligence, training, and transition. A few books that may be helpful for creating better systems include: “E-Myth Mastery” by Michael Gerber, “Work The System” by Sam Carpenter, and “The Toyota Way” by Jeffrey Liker. See below:
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