If you want to sell your business, one of the best things you can do is show the potential buyers it can actually run itself (business autonomy).
If you’re looking into selling your business, one of the best things you can do is show buyers that your project can run entirely on its own. Why? Because if you demonstrate your business is actually based on processes and not a founder or a particular set of managers, they will know they can take over right then and there. This might sound simple, and in fact, it can be. Let me show you an example.
How We Sold Our Business Quickly and Easily
A few years ago, we were in the process of selling our business. There comes a stage when as part of the purchaser’s due diligence, they want to meet your management team. For me this involved the purchaser flying over around 20 people from New York to London. These 20 people weren’t juniors in the business, they were the top most senior people in a billion dollar company, they included CEO, CFO, COO, CTO, CRO etc accompanied by their next tier employees.
These 20 people then spend 2 days in a room with my team of 6 and their team of advisers and my advisers. So there were around 30 people in one big room and the purpose of the meeting seemed to be for my team to be questioned on every aspect of how the business works.
We all arrived at nine in the morning and spent the first half of the day being grilled on various things, such as finances, development, sales, marketing, IT structure, customer service, etc. During this time, what these buyers were asking is how we did things - what our processes were. Apparently, this is quite a common scenario if you’re selling; you’ll always be asked about your processes. I was surprised how much effort went into it, though.
Now, these people expected this knowledge to be clearly understood by our management team i.e. stored in their heads. They are the ones in charge of making sure things work, and everyone is pushing in the same direction. So, most companies would get these managers to explain how they did things. Not us, though.
Because we used BeSlick, we didn’t store our processes in people’s heads. They were in the system. Their team started asking questions and after a short while whilst on the topic of customer onboarding, one of my team loaded up BeSlick and started showing the live processes. Immediately the purchaser’s FD stopped him:
“No, we don’t want to see what it says in the file, we want to hear how you actually do it.”
He knew that most people have documentation, but that it’s almost always out of date and doesn’t capture the nuances of how things really work.
I had to step in:
“I’m sorry, this isn’t a document, this is a live view of the process you are asking about. These are the customers we are onboarding right now and this is where we are up to, this is what’s been done and this is what has to be done next.”
I continued:
“My team can’t tell you the process because they don’t learn it, they use this system to actually help them follow it. And because of this system we have been able to make our processes so good and so agile that it would be difficult if not impossible for everyone to keep up.”
At that point everyone on their team got up out of their seats and started flocking to the screen at the front of the room looking in awe at this data.
They thought what they were going to see on the screen was a reference process that nobody really followed. Instead, they were faced with all the instances of every time we’d run it so they could know exactly what had happened.
The FD turned to me:
“So does this means you have an audit trail of every customer you’ve onboarded and what you did and didn’t do?”
“Better than that” I said, “every time we onboard a customer and it doesn’t go perfectly we use this to make sure we never make the same mistake twice.”
First, You Need to Capture Process
The buyers’ paradigm was that people would store all these processes in their heads. So, naturally, their concern was that they wanted to make sure they could see that knowledge as communicated by our management team. But it shouldn’t work like that, should it? You shouldn’t have to rely on people’s memories, especially when they can just move on and switch jobs. Because then, they would take that knowledge with them when they leave and all you’d end up with is some confusing document with processes that might or might not have been touched in years.
By capturing all this information in a single, efficient system, you can continue operations seamlessly, no matter how many team changes you have. And you can also tell the story of your business to others, showcasing not just how things are done right now, but how they have been done in the past and why you were able to improve on these steps.
Now, you need to capture these processes because you obviously can’t store them in people’s heads. Our memories are not that great to begin with, people just move on to explore other jobs. You can’t correctly capture this complexity in a static document, either. We all know what happens to those; they get buried in the deepest of drawers or they become little more than a conversation starter for:
“oh, but we don’t actually do things this way anymore”.
If you want processes to be effective, you need to document and share them in a way that allows people to actually live them. They are, after all, made for the people that will use them.
Then, You Need to Let Your Processes Evolve
Capturing processes is, of course, essential. If you want your business to be able to run on its own, you need them to fill in the gaps when, for example, someone can’t remember how to do 101 different things. But processes are not supposed to remain static, either. They can (and should) evolve and grow.
When you run a business, you will always encounter areas where you can improve further. Things can, indeed, be changed for the better. They should! This, in turn, can empower people to keep improving.
Your processes should not control the team, but in fact work the other way around. If you encounter issues in your business, and you solve them, add that into a process and you’ve solved the problem once and for all.
Lastly, You Need to Remember People Are Smarter Than Processes
It’s often believed that processes are set in place to prevent people from making bad decisions. This is not how it works - or should work. If you have smart people, then they know when a process could work better, whether it be by deleting a step, adding one or changing something.
If you want to excel, then you need a mechanism to capture these improvements and incorporate them into your processes. That way, your processes continuously evolve and improve to become the best they can be.
Now, picture a sad, static old document with a series of steps and compare it to a system that is capable of not just capturing processes as it happens, but can also be adapted and improved based on factual information on what has worked and what hasn’t. It’s a world of difference.
Conclusion: Why Your Business Should Run on Its Own
To have your business running on its own (and investors happy to engage in what’s clearly a successful endeavour) you need great, embedded processes.
In the example I shared above regarding our experience selling the company, our guests agreed to buy the business straight up. They could see exactly how things had worked from the beginning, where we were at that point, and a clear plan for the next few years. Everything was laid out in front of them, and they knew they wouldn’t have to extract all the important information from our management team. It was all there, in the system.
After the sale was agreed upon, they actually offered me to stick around for three months. I didn’t have to. Because things were running so well, we decided I could go after just two weeks. So I walked away, to start my next venture bringing BeSlick to the world.
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