As an Owner you “set the tone” for your organization. It can be a harmonious one or a discordant one and it depends entirely on your efficacy as a communicator of your organization’s knowledge and values. In addition to your general disposition as a leader and manager your explicit actions in the way you set up company policies and processes will have a strong impact on your employees’ effectiveness on the job. Employees must be effectively trained and well informed so that they are able to perform their duties with a minimum of confusion, so that customer requirements are accurately recorded and transmitted to those who must act on that information, and safety rules and quality control policies are diligently observed. All of these requirements must be catered to by the clarity and consistency of the messages coming down from management. When it comes to directing employees, the less static the better!
Now it probably goes without saying that you must communicate with your staff in order to ensure your business continues to operate, so how does this affect the sale of a business? Well, depending on the type of business, your work processes (such as Quality Control) can be critical to your competitive advantage. Heck, they can be critical to the basic functioning of your organization! Your business processes are at once the glue that holds the human parts of your organization together, and the grease that keeps things functioning smoothly, reducing friction, conflict, and losses. Simply put, things get built more quickly, with fewer mistakes (and thus losses) if employees have clear, understandable instructions to follow in completing their tasks. As just one example employees are happier and more productive when they feel they are working effectively. This in turn will affect the way potential buyers value your business!
Think of it this way: Costs are at the forefront of a buyer’s mind before and after the business sale transaction is complete. Not only are they interested in the fixed assets of the business, its location, and its reputation, but they are also concerned with how long it will take them to recoup their investment from the income their new purchase generates. If your business is run incompetently, work quality is haphazard and the employees unreliable then a prospective buyer is likely to foresee costly management and employee changes as necessary just to bring the business back up to industry standard. This will lengthen their time to break even and they will most certainly discount their offer accordingly. Some buyers who aren’t interested in that kind of “fixer upper” might not even make an offer at all! But, on the other hand, if your business is itself like a finely oiled machine, all departments humming with staff and management working in harmony, guided by your established policies and competent leadership, you might even be able to demand a premium over similar businesses.
As a Manager/Owner you must ensure your staff have the training and/or information they need in order to perform their responsibilities to the very best of their abilities. Brokers can only market your business and I’m certainly not one to tell entrepreneurs how to go about shaping your work processes and corporate culture, but your planning and communication are absolutely factors in shaping a buyer’s perception of your organization. The ability to cut through the noise and deliver static-free signal to give your people a complete set of tools to do their jobs is of paramount importance for not just you, but anybody else who may eventually fill your shoes.
Submitted by Jey Arul