Have you ever purchased a property with the intention of renovating it, only to get most things done but not all of them? Then, as part of the preparation in order to put the property on the market and make it look as appealing as possible – all those last minute, unfinished tasks get done. The ‘improvement’ is finalised – all the things that didn’t quite work are fixed, the tiling is finished, the painting is touched-up, the cracked concrete is repaired etc etc.This is the ‘manage & maintain’ stage – it means that the initial work is completed and only maintenance is required unless a specific development or improvement opportunity presents itself whereby work starts, finishes and returns back to the ‘manage & maintain’ stage. Many people then regret the need to sell, as the property finally represents what they originally envisioned – but someone else gets the benefit of that expense and labour!So it happens in business.Any business should have a business plan, and part of that would include an exit strategy. The exit strategy may be to merge with another organisation, grow to list on the stock exchange or to sell etc. To ensure a smooth exit, the most effective business strategy is to be at an efficient ‘manage & maintain’ stage from the outset, which of course enables the company to go through relevant business development and improvement continuously, not just at the time of exit.Of course, at the time of sale the company must be in the most organised, and fortified, position possible to make it as attractive and of the highest value possible. If it is not at an efficient manage & maintain’ stage, there would need to be a great deal of catching up, frantic documentation and throwing together of information under pressure.I was discussing the sale of an engineering company with the current owner recently. The new (potential) owner had focused on the financial and had undertaken a comprehensive Due Diligence strategy regarding running costs, capital expenditure etc. This necessitated records being dragged out from dusty boxes outlining real costs for purchased items over a long historical period. All very well – and, of course, appropriate.However when I asked the current owner whether the purchaser had asked for the Safe Operating Procedures (SOPs) for all his equipment, for the flowcharts showing the order and delivery to use of raw materials, the customer contact register or the supplier list, customer history and so on – he gleefully told me that no, the purchaser hadn’t asked for any of this – and that he only had 3 more days before the Due Diligence period lapsed so he wasn’t going to have the time. He thinks he is ‘out of the woods’ regarding provision of this information and that his consulting back to the company over a six month period would compensate for this.This not only places him at long term risk regarding what has or hasn’t been provided (years later), it also means that he is not in a healthy position to provide it in the first place.As advocated in the Corporate Fingerprint system, there are four types of records that should be managed, maintained and form the basic culture of every organisation:
The Source
The Client
The Internal Work In Progress
The Archive
In particular, the Source – in this instance, is critical. It should contain all the procedures, SOPs, Registers, Policies, Position Descriptions, organisational charts, marketing material, images etc. It is the ‘how to’ of the business and contribution from all departments should be contained in The Source. Each document should be uniquely identified; it should be able to be found via direct navigation or via a search mechanism and it should be managed as part of the Quality Documentation forming the business culture.This, in itself, would form a substantial part of the Due Diligence required of any purchaser. The Client information, proof of adherence to quality management, Occupational Health & Safety and Environmental strategies and other information would also be managed via online & physical records.However, the collation & provision of this information is often, sadly, a last minute throw together and time consuming exercise because it is not maintained as part of the business culture. The business cannot run as efficiently or as effectively without it, and only the new business owner will benefit from the work undertaken, instead of this being an ongoing business benefit.Much of this information is often available in any organisation, but it is scattered, there are different versions created by different people, everyone has their own copy, there is little or no quality control and no one can find the latest version.It really does not have to be an expensive, onerous or difficult task – it simply needs to be recognised, implemented and managed.If the skills are not in-house to implement this as a priority – get outside assistance, it really is worth it.