One of the most inexpensive ways to increase business value and marketability is by documenting key systems and processes. From customer acquisition and order fulfillment to client feedback, mapping processes can reduce dependence upon key employees, improve the customer experience, and reduce inefficiency. Lower risk can translate into a higher price multiple for your business and increased efficiency can result in higher profits.
What is a process document?
Essentially, a process document is nothing more than a record of the steps necessary to complete a series of tasks. The collected records are kept in a central location and serve as training or cross-training guides.
This type of documentation is important because most businesses are made up of interrelated processes. When a breakdown occurs, it often creates bottlenecks and inefficiencies. Not only do process documents reduce the impact of losing key personnel due to injury or dismissal, but they also increase business valuation and ensure a smooth transition for a new business owner.
Because of their value to a new owner, process documentation often increases the valuation of a business when it comes time to sell or if you need financial backing.
Creating The Process Documents
The first thing you need to do is view your business as a franchise with a turnkey playbook. Assume that a new owner will know nothing about workflow, systems, or methodology.
Start with critical employees in key departments such as Operations, Customer Service, and Sales & Marketing. Ask them to create a process map or flowchart that visually describes how business flows through their department. Then ask them to detail what they do on a monthly, weekly, and daily basis.
Don’t stop there. Do the same for every department. You should also engage frontline workers and ask them to share ways they have found to make their jobs easier and more efficient. Not only will this be of benefit during a turnover but it may spotlight new methods of doing things faster or bring to light areas of opportunity. Managers can monitor and manage delegated projects and find ways to eliminate overlap or inefficiencies.
How Do You Gather Business Process Documents?
To complete the process of documentation, you can hire an outside consultant, or you can provide process documentation templates to your employees.
Building a Document Process Template
Set the following guidelines for documenting key systems and processes but give your employees leeway to add information as they feel led. Not all tasks are straightforward and many may need additional instructions.
- Identify the Task
- State the purpose of the task and a brief description of the process.
- Provide a brief description of what triggers the process to start and what signals its completion.
- Identify the outputs or deliverables that will be produced.
- Make a list of the necessary resources for each step or task within the process.
- Add notes to clarify any possible bottlenecks or friction points and explain how to overcome them.
- Help to visualize the process flow by making a list of sequential steps and tasks.
- Record the names and contact information of any other stakeholders.
- Once finished, test the process by having someone else work through the steps to see if anything was left out or is unclear.
You should leave a copy of the process documents at the employee’s desk so they can be updated in real-time and keep another in a central location. Make sure that the second copy is updated regularly to include any edits made by your employees.
Whether you want to sell your business or increase its value, process documentation is an inexpensive step that can also reduce risk and increase profitability. For questions about this topic, contact us today.