When you decide to sell your business, you’re obviously selling something that doesn’t include you. Your act of selling excludes you as the leader of the business.
Imagine you’ve created a machine, the business, and it requires your highly specialized daily maintenance in order to keep running.
Imagine that all of the information one might find in order to make sure it runs properly is stored in your head, and you continue to operate it until one day, for whatever reason, you can’t anymore.
In this scenario, your machine or business is essentially useless. There’s a chance somebody will want to take the time to learn on their own exactly how you’ve managed to run each part.
But if they do, they run the risk of letting the machine shut down irrevocably in the meantime. That doesn’t seem like something on which a smart businessperson would want to hedge bets.
It’s easy to understand then why making sure your company can run without you adds significant value. Properly written instructional guides for every aspect of your business, for every system that makes it operate properly, gives your company an advantage.
If you’ve spent that much time working on your systems, the process of purposely creating systems has probably been implemented into your company culture. Your current employees understand the importance. Future employees or even future business owners have guidelines and instructions to follow and tweak with time.
If you adjust your way of thinking around the infrastructure you’ve put into place, it will be much easier to value the business.
You have concrete systems to show for yourself, to any potential buyer, which tells them that you’ve done a lot of hard work and set something up worth paying for. This is a company for a future business owner to put money into.
Besides the appeal to a future buyer of your business, this kind of set up also has several other effects. The prospect of building a company that can run on its own doesn’t mean you’ve become invisible. It means your employees feel much more visible.
They feel their work is significant, so they deliver significant work. This empowerment can create loyalty to the company and the environment you’ve created. As long as it’s in the best interest of employees to continue to work in a conducive work environment, they will stay with the company that helps them grow.
Whatever reason you decide to leave the business, perhaps to retire or to set off on a new business venture, this leaves the brightest and most enthusiastic to help instruct a new leader. It gives you peace of mind, knowing that the business you spent so much time and effort building up will continue your legacy even after you’ve gone.
Certain parts of the business that are hardest to measure will be most valuable. These measures of success include efficiency, loyalty (from employees and customers), reputation, respect.
Though it’s difficult to measure them monetarily, these factors all add monetary value to your business.
The easiest way to make sure your business sells is to be able to explain and put a value on these aspects, to have previous research to back up future predictions of success, and to be able to provide proof that you’ve built a business that can nearly “run itself” thanks to the systems you’ve put in place.
You’ve built this business from the ground up. Or if you didn’t start the business but instead came in and reimagined it, those systems you put into place are what make the business what it is today.
That work, as you know, is extremely time-consuming and teaches you as much about yourself as it does about the way to run a company.
Creating this network of systems for your company is in many ways about creating a business that serves you.
Likewise, the business will serve anyone who decides to run it along the same guidelines you’ve learned to put in place.
Imagine if you’d had the guidelines you’ve written, when you started out. This, combined with a loyal customer base and happy employees, nearly makes whatever service or product your business is selling irrelevant. The important thing about your business is the way it runs.
This creates a specific work environment and it creates an experience that your customers learn to expect. There will always be changes to be made, ways to do things more efficiently or successfully. But these systems give whomever operates within them the room to make changes.
It gives an alternative to feeling like, as a business owner, you’re running circles on a hamster wheel. This is the kind of business that is most appealing to potential buyers. It’s the kind of business that sells, and with significant value.