Owner taps his head. Smiles.
To him, it's experience. Expertise. The accumulated wisdom of twenty years.
To a buyer, it's risk.
Because wisdom that lives in heads walks out the door.
What actually lives in "up here":
Which customers are profitable, which are headaches. Which vendors deliver on time, which need constant follow-up. Which employees can handle pressure, which can't. How to price complex jobs. When to push back on unreasonable demands. Who to call when things break.
None of it is documented. All of it is essential.
When buyers see this, they see a business that breaks when you leave.
They're right.
The fix isn't complicated:
Document one system per month. Start with the most critical.
Put pricing logic in a spreadsheet with assumptions visible.
Track customer interactions in a CRM, not in your memory.
Write down maintenance schedules and vendor contacts.
Create operations manuals that explain how things actually work.
Train someone to do what only you do now.
Boring work? Yes. Time-consuming? Absolutely. Worth an extra 1-2x EBITDA multiple? You tell me.
The math:
$2M EBITDA business at 3x = $6M Same business at 4.5x = $9M
That $3M difference? It's the tribal knowledge premium.
You spent twenty years accumulating it.
Spend twelve months documenting it.
Your future self will thank you.
ACTION TIP: Start the "Tribal Knowledge Transfer Project" tomorrow. Every time someone asks you "how do we handle [X]?" stop and document your answer in a shared location (Google Docs, Notion, whatever). Make it a rule: if you answer it twice, you write it down. In 6 months, you'll have captured 80% of the critical knowledge in your head.