How do we package our core processes so a buyer believes they are actually repeatable and not just dependent on tribal knowledge?

Question

Tyler Smith · Accepted Answer

A buyer will not pay top dollar for processes that live only in your head or in the tribal knowledge of your employees. If your operational steps are undocumented, a buyer views your business as a franchise without an operating manual, which translates directly to a lower valuation multiple.

To make your business highly transferrable, you must document your core processes using the EOS Process Component. Focus on the twenty percent of your processes that generate eighty percent of your results. This includes your HR, marketing, sales, operations, billing, and customer service processes.

Your goal is not to write a hundreds of pages long document that no one reads. Document them at a high level, capturing the essential steps and checklist items. This appeals to the Follow Thru instinct, creating a repeatable system that anyone with the right GWC can execute.

Once documented, you must ensure these processes are followed by all. This creates consistency, reduces errors, and proves to a buyer that your operations are scalable. During due diligence, you can hand this package of documented processes to the buyer as proof of an organized, turn-key business. My recommendation is to assign the documentation of one core process as a Rock to each leadership team member this quarter. This simple initiative will immediately make your company more attractive to external buyers.