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Ugh! No! Written Procedures? The Most Dreaded Driver of Business Value that You Need to Address

by David Shavzin

Written Procedures – Don’t leave money on the table in your exit planning and succession planning!

If I recommend to a client that they document all of their procedures, I usually get a verbal, or nonverbal “Ugh!”, and get walked to the door.

If I say I have a recommendation that will help them:

  • Grow Revenue
  • Grow Profitability
  • Build Value
  • Improve Customer Retention
  • Minimize Errors
  • Grow their Customer Base
  • Improve Employee Morale AND Retention
  • Reduce Safety Incidents
  • Minimize Potential Fines from Regulatory and Compliance Problems

…they ask me to take a seat and fill them in.

Of course, the recommendation is the same. Document how you do things, how every single business process happens. This is one of several critical drivers of business value, whether your succession plan / exit plan target is two years from now or ten years from now.  Documentation of your processes is an incredible benefit in countless ways. I am NOT suggesting writing these procedures just so you can say you have them.

Approaching this the right way will provide a significant, immediate ROI and will enhance the value of your business over time as you approach a sale.  

The right approach means engaging all of your staff. Profitable business process improvement means working together on written procedures and, along the way, focusing on improvements that can be made right away.

Your business valuation will increase. And, I have seen clients achieve significant bottom line improvements in operations and their customers’ experience by reviewing what they do and how they do it…then documenting the procedures. A client went paperless over night after a team discussion on the flow of paper through their critical business processes. A small team of eight people absorbed the loss of a team mWrember without filling the position…by reviewing, improving and documenting their processes. The ROI can be stunning.  Another client example.

 

When you can provide this thorough documentation to a potential buyer of your business, the price goes up.

That buyer has the roadmap and does not have to figure things out. Think about the franchise model. While there are many elements to consider in a potential purchase of a franchise, a significant plus is being handed the manual.

If a buyer is considering whether to buy your company or your business, and you are similar in revenue, profitability, competence of your staff and other attributes, having the Ugh! Oh NO! manual of procedures to hand over will bring you that higher sale price.

I believe that most business owners know this, and that you know this, we just never get around to…and therefore leave too much money on the table when it comes time to sell.

The Bottom Line on the Value of Written Procedures and Business Process Improvement 

Having written procedures is a value driver for your business. Start now, build on your written procedures over time. Rushing when you are about to sell will not work.

 

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More Reading – Process for Business Exit Success:

Step 1: Exit Planning / Succession Planning is a TEAM SPORT

Step 2: Knowing Your Business Value

Step 3: Transferable Value Drivers

Step 4: Business Exit Options.

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David Shavzin, CMC

Shavzin and Associates, Inc.

Valuation, Succession / Exit Planning, Building Value for Sale

Atlanta, Georgia

770-329-5224

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dshavzin@shavzinassociates.com

www.ShavzinAssociates.com

Building Business Value - Business Growth, Business Valuation, Client Case Studies, Exit Planning - Succession Planning

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