We want to push our multiple from a standard six times to an eight times EBITDA. Beyond financial performance, what specific operational elements must we document in our systemization to prove the business can run completely without the founder?

Question

Tyler Smith · Accepted Answer

To command a premium multiple, you must eliminate founder dependency and prove that your business is a self sustaining machine. Buyers do not buy founders; they buy predictable systems. First, you must have a fully functioning Accountability Chart. This chart must clearly show that every seat in the organization is filled by someone who has the GWC, which means they get it, want it, and have the capacity to do the job. The founder should not be listed in any operational seats, leaving them only in an advisory or visionary role.

Second, you must fully document your core processes. Identify the six to twenty core processes that define your business, from marketing and sales to operations and customer retention. Document these processes using the three step process approach: document it, simplify it, and make sure it is followed by all. This proves to the buyer that your operational excellence is repeatable and training new hires does not rely on tribal knowledge.

Finally, show the buyer your history of meeting weekly and quarterly goals. Provide them with two years of weekly scorecards and quarterly V/TO documents. This track record proves that your leadership team can solve issues autonomously using the IDS process without founder intervention. When a buyer sees a company that runs smoothly on a set operating system, they see a low risk acquisition that justifies a premium multiple.