How documenting processes can increase the sale value of your business

Selling a business can be an emotional and time-consuming endeavour.

With more than two million small businesses in Australia, plenty of owners are casting the odd sidelong glance into the market to see what their businesses might fetch.

How much you profit from the sale of your business depends on multiple factors.

These include the way the company is structured and the strength of its operation.

But before emailing your local business appraiser or broker, consider this: whether you’re a tech startup or an eBay seller of royal family crockery, it pays to sort out your business systems first.

In fact, it can make your business worth much more – according to Jacqui Jones, co-founder of Way We Do, a cloud-based Standard Operating Procedures software company.

“It can increase the sale value by two to three times compared to a similar business that has not been systemised,” Jones says.

“We help businesses to systemise by providing tools for teams to document and actively use work instructions they can access from any location, on any device.”

Documenting efficient processes is like weeding a garden: it can be hard work, but there’s real pleasure to be derived from knowing you’re improving everything.

“All processes are documented – so the team knows the system behind the business, and they are empowered to run that system,” Jones says.

After you document your processes, your operations manual is not simply a printed, spiral-bound manuscript gathering dust on a shelf.

“Our technology prompts the team to keep referring back to the policies, procedures and working structures.

“Way We Do software contains checklists and recurring tasks which prompt the team member to refer to those materials as they work – we’re actually embedding those procedures within their day-to-day workflow.”

This increases business value markedly “because once a business has been systemised, it’s usually much more efficient, meaning it has the ability to generate much more revenue,” Jones says, “and it has a higher productivity rate.”

 

Three ways business process documentation increases the value of a business

They say everyone has a book in them – as it happens, so does every business.

By documenting your business processes, you can accurately identify what kind of value you’re sitting on.

Here are three benefits of getting your processes sorted, documented and systemised.

 

Documenting small business processes

Documenting your business’ processes can help you understand its true sales value. 

Benefit one: Expand your network of potential buyers

If your business processes aren’t documented, only people in your industry or with certain expertise will be able to run it, Jones argues.

“When everything has been systemised and documented, an investor can come in, purchase the business, and bring in other management without necessarily having the expertise for that industry.”

If you operate in a niche industry, you want to be able to attract, as many buyers to your business as possible.

“And not just from your local area,” she says. “You could look for buyers nationwide or internationally.”

 

Benefit 2: Shorter handover

Once a systemised business is sold, the former business owner (you) can step out of the business sooner.

Sometimes when you’re selling a business, the new owner wants the seller to remain on the scene for many months to ensure a smooth handover.

“Of course, once the former owner has sold the business, they want to move on to new things,” Jones says.

“Having everything documented minimises that time.”

 

Benefit 3: Knowledge is retained in the business

When a business owner leaves, sometimes key staff choose to move on as well.

This can cause a very disruptive expertise-drain.

“By documenting processes, the knowledge of the business is retained in the business,” Jones says, “which means you can employ new people and bring them up to speed much faster.”

Even if you’re not considering selling your business, systemisation is a smart way to ensure you’re well prepared for any staff turnover.

While there are many factors that drive business value, systemising and documenting business processes is a proven ‘win-win-win’ for business owners, employees and business buyers alike.

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