Why I Believe Documentation Is the Hidden Backbone of a Business

When I first started buying companies, I thought financials, customers, and employees were the biggest drivers of long-term success. They are critical, but I overlooked something less obvious: documentation. Over time, I’ve come to believe that documentation is the hidden backbone of a business.

Without documentation, a company may function well under its current owner, but it becomes fragile. Knowledge lives in people’s heads, processes are inconsistent, and new employees struggle to adapt. With documentation, a company becomes resilient. It can grow, transition, and operate consistently regardless of who’s sitting in the owner’s chair.

In this article, I’ll explain why documentation matters so much, how I evaluate it when buying a business, and how I implement it in the first 90 days of ownership.

Why Documentation Matters

Documentation transforms chaos into order. It takes the “tribal knowledge” that only long-time employees understand and turns it into systems anyone can follow.

The benefits are enormous:

• Consistency: Every customer gets the same level of service.
• Training: New employees ramp up faster.
• Resilience: The company survives turnover without losing critical knowledge.
• Scalability: Processes can be replicated across multiple locations.
• Transparency: Leadership can measure and improve performance.

Without documentation, businesses rely on memory, habits, and improvisation. That may work in the short term, but it won’t last through growth or transition.

My First Wake-Up Call

In one of my early acquisitions, I assumed the business was well-documented because it had been around for decades. But when I asked for process manuals, there were none. Everything existed in the heads of two long-time employees.

When one of those employees left six months after closing, chaos erupted. No one knew how to handle certain tasks. Customers complained. I spent weeks trying to reconstruct processes that should have been documented years earlier.

That painful experience convinced me that documentation isn’t optional; it’s essential.

How I Evaluate Documentation in Due Diligence

Today, I make documentation a core part of diligence. I ask sellers for:

• Operations manuals.
• Employee handbooks.
• Standard operating procedures (SOPs).
• Training guides for customer-facing roles.
• Checklists for recurring tasks.

If these don’t exist, I assume I’ll need to invest heavily in building them after closing.

Why Lack of Documentation Lowers Valuation

From a buyer’s perspective, a lack of documentation increases risk. It means the business depends on specific people, usually the seller. That fragility reduces value.

Businesses with strong documentation, on the other hand, transfer more smoothly and command higher multiples. They’re easier to finance, easier to scale, and easier to trust.

How I Build Documentation After Closing

If I buy a business with weak documentation, I prioritize building it in the first 90 days. My process is simple but effective:

1. Shadow Employees

I watch how tasks are performed and take notes. Employees often don’t realize how much they know until someone asks.

2. Create Checklists and SOPs

I turn those observations into written procedures, step-by-step guides anyone can follow.

3. Involve Employees

I ask employees to help refine the documentation. This not only improves accuracy but also builds buy-in.

4. Store Everything Accessibly

I make sure documentation is organized and accessible, whether in binders, cloud folders, or internal systems.

5. Update Regularly

I set a cadence for updating documentation. Processes evolve, and documents must evolve with them.

Mistakes I’ve Made

I’ve made mistakes by trying to over-document too quickly. In one acquisition, I overwhelmed employees with binders of SOPs overnight. They resisted, seeing it as bureaucracy rather than support.

Now, I implement documentation gradually, starting with the most critical processes. Once employees see the benefits—fewer mistakes, less stress—they become more supportive.

Why Documentation Builds Culture

Documentation isn’t just about efficiency; it builds culture. A documented company signals professionalism, accountability, and respect for employees’ time. It tells staff, “We care enough to make your job clear and predictable.”

I’ve found that employees in well-documented businesses feel less stressed and more empowered. They know what’s expected of them, and they know how to succeed.

Documentation as a Growth Multiplier

For me as a buyer, documentation is also a growth multiplier. If I want to expand to new markets, documentation makes it possible. I don’t have to reinvent systems in every location. I can replicate what works, train new teams quickly, and scale confidently.

Without documentation, growth becomes guesswork, and guesswork doesn’t scale.

Final Thoughts

I’ve come to believe that documentation is the hidden backbone of a business. It doesn’t show up on financial statements, but it determines whether a company is fragile or resilient, stagnant or scalable.

When I buy businesses, I value documentation as highly as customers, employees, and financials. If it’s missing, I make building it a top priority. Because in the end, documentation isn’t paperwork it’s the foundation that allows a company to grow, transfer, and thrive for years to come.

I continue sharing my acquisition strategies and lessons at DrConnorRobertson.com, where I document the frameworks I’ve built deal by deal.