Seeing your business through different eyes

While searching for a business to take over, we visited many companies. During one of our first conversations, we asked about the supplier contracts. The answer: "We agreed on that with a handshake." The relationship had grown over the years, the trust was there, and it had always worked. It was only when we looked at it as outsiders that what had long become second nature to the entrepreneur became visible.

Apart from that, this business was in excellent shape. The figures were clear, the structures easy to follow, the documentation solid. But that one point stayed with us. And it showed us how valuable it is to see your own business through someone else's eyes. Long before a potential buyer comes knocking.

Because the more knowledge, relationships and decisions rest solely with you as the owner, the smaller the circle of people who could one day take over your business. And the less of it is documented, the harder the handover becomes. These are two sides of the same coin: sharing responsibility and capturing knowledge.

The following questions help you look at your business from this perspective. In your own time, just for yourself, before things become concrete one day.

What only you know

In many small businesses, the owner carries more knowledge in their head than meets the eye. Customers who have been dealing exclusively with you for years. Suppliers who know you personally. Processes you have been doing the same way for years. Decisions you make every day, often within seconds, because you know how things work.

This has grown over time, and it shows how closely you are connected to your business. The first step is to become aware of everything that depends on you. And then: start writing it down.

Your employees

Who in your team can make which decisions? Who knows which processes? Who is the point of contact for customers? And who knows things that nobody else knows?

In some businesses, there are employees who have taken on responsibility over the years. They know the customers, they know how the machines run, they make decisions when you are on holiday. That is valuable. Take stock of who plays which role in your team. And consider whether there is knowledge that currently only you hold and that you could pass on.

This also includes a look at the structure: how old are your employees? Are any retirements coming up in the next few years? Are there any fixed-term contracts? This information matters to a potential buyer, because it shows how stable the team is.

If your business is run as a limited company and you as the managing director have a company pension commitment: this is something you should discuss with your accountant early on. Such commitments can represent a long-term obligation for a buyer and put strain on the negotiations.

Your customers and suppliers

How many of your customers know only you personally? Are there customers who buy exclusively because of their relationship with you? And what about your suppliers: which agreements are in writing, which were made verbally? Who gives you priority when things get tight, and why?

And then the question of distribution: how is your revenue spread? Does a single large customer account for a significant part of your business? Or is the revenue spread across many shoulders? And on the other side: is there a supplier your business is particularly dependent on? What would happen if that supply relationship were to end? Take a calm look at both sides.

Your figures

Balance sheets, management accounts, revenue trends, cost structure, ongoing loans. Most business owners have these figures. Often with the accountant, sometimes in folders, sometimes spread across different systems.

You have the overview. But a potential buyer who one day looks at your business needs a picture they can read and understand. The figures from the last three years, brought together, structured, ready to hand.

Your contracts

Leases, employment contracts, supplier agreements, framework agreements with customers, maintenance contracts for machinery, ongoing warranties and guarantees. Much of this exists. Some in writing, some agreed verbally.

In day-to-day business, this works. But if you want to hand over your business one day, you need clarity. What is in place? Until when does it apply? What obligations exist? Create an overview that shows what is there and where it can be found.

The future of your business

A potential buyer looks at what is there today. But they also ask: what will it look like tomorrow? What has been invested in recent years? Is the offering competitive? And what needs to be done in the years ahead?

You know your business. You know where investments are needed. New machinery, a refurbishment of the premises, a software update. Be aware of these things and note them down. What is coming up, what has been postponed, what would make sense? A potential buyer will ask about this. And it is good to have answers when they do.

A good starting point

If you one day put a price on your business, there is a question behind it: what can I hand over? A business where responsibility is shared and knowledge is documented gives a potential buyer confidence. And it widens the circle of those who could take it on.

The preparation begins long before a potential buyer comes knocking. It begins with seeing your business through someone else's eyes. That is a quiet step. And it starts with you.

If you have been running your business for years, you know every corner. Customers, suppliers, processes, the small decisions that come up every day. Much of it has become second nature. But what happens when someone else looks at it for the first time?

This article is an invitation to see your own business through different eyes. In your own time, step by step.