Why it matters
A business that runs from memory is harder to take over than one that runs from written procedures. Pricing rules, supplier ordering, month-end steps, the fix for the machine that jams, the customer who needs a call before every delivery: when this knowledge sits with one or two people, the handover becomes a race to capture it before they leave.
Missing documentation rarely stops a deal on its own. Sellers and staff can write procedures down during the handover, and many buyers expect to do some of this work themselves. But it raises the cost and risk of the first months. Errors in quoting, billing, stock control or compliance can go unnoticed until customers complain or an inspector calls. It also limits whether a manager can run the business, or whether you can run it remotely, which affects both your plans and what the business is worth to you.
Treat it as a signal as well. If nothing is written down, look closely at whether the financial records, contracts and supplier terms are in similar shape.
The fix is to make documentation a deliverable. You can list the core processes to be written up in the handover plan, agree who writes them and by when, and ask your lawyer how to reflect that in the sale agreement. The handover and first 30 days checklist covers what to capture.
How to spot it
- The seller describes operations in general terms but struggles to walk through a routine task step by step.
- There is no operations manual, shared drive of procedures or training material, only emails and spreadsheets on one laptop.
- Staff defer every non-routine question to the owner or one long-serving employee.
- The business slows down noticeably when a key person is on holiday, or they rarely take one.
- Business software was set up by one person, and the owner holds the logins.
- Quality, safety or compliance checks happen but are not recorded.
A useful test is to pick three ordinary tasks, such as issuing a quote, processing a refund and ordering stock, and ask to see someone other than the owner do each one.
Questions to ask the seller
- Which tasks can only you, or one employee, carry out today?
- What happens to the business when you take two weeks off?
- Where are procedures, templates and system logins kept, and who can reach them?
- How are new staff trained, and how long before they work unsupervised?
- Which routine tasks depend on spreadsheets or tools you built yourself?
- Would you document the core processes before completion as part of the agreed handover?
Documents to request
- Any operations manual, standard operating procedures or training materials
- A list of the software, systems and online accounts the business uses, with the administrator of each
- Job descriptions and an organisation chart
- Recent real examples of the core workflows: a quote, an order, an invoice, a purchase order and a month-end close
- Records of quality, safety or compliance checks for the last 12 months
- A proposed handover plan listing the processes to be documented, by whom and by when