When it comes time to sell their company, business owners realize they’ve never planned for an event like this and they don’t know where to start or what to do. It can be confusing and frustrating. It shouldn’t be so difficult to sell the company, ride off into the sunset, and start the next chapter of life they dreamed about.
I’d like to tell you about a software development company founded by 3 engineers. It had grown from a garage startup to a mid-sized enterprise with 50 employees. Despite their success, the founders knew they faced a significant challenge: they wanted to sell the business and move on to new adventures.
They had always been hands-on, and much of the company’s knowledge was stored in their heads or shared verbally among employees. Recognizing this as a potential obstacle, they decided to invest time and resources into documenting all their processes.
The transformation began and they created detailed guides of every aspect of their business. This included guides for software development practices, client onboarding processes, sales and marketing strategies, and even day-to-day administrative tasks. Each department contributed to building a comprehensive operations manual, ensuring nothing was left out.
Six months later, the results were astonishing. Not only did the documentation streamline their internal operations, but it also made training new employees faster and more efficient. Projects ran smoother, and clients noticed the increased consistency and professionalism in their interactions with the company. Further, management was persistent in verifying that the processes were being followed by all employees with regular check ins.
When the time came to sell the business, these engineers/entrepreneurs were approached by multiple interested buyers. During due diligence, potential buyers were impressed by the detailed documentation. It provided them with a clear picture of the company’s operations, reducing perceived risks and uncertainties. Buyers could see that the business was not overly reliant on its founders or any single employee, which significantly increased its attractiveness.
In the end, the company was sold for a premium price. The documented processes had not only increased the company’s efficiency, but also its market value. The new owners were confident they could continue the success without disruption, and the founders were thrilled to see their legacy continue seamlessly. Through the power of documentation, the value was more than expected, and the founders’ dreams of new adventures became a reality.
