The org chart and roles a buyer wants to see

The org chart a buyer wants to see, with clear roles and responsibilities, shows one thing: who runs each function when you're not there. One page with named managers for sales, operations, finance and people, plus a sheet for each key role saying what that person decides alone. No arrows that all lead back to you.

What a buyer reads in your org chart

To a buyer, the org chart is an X-ray. In a few seconds, they see where decision-making power sits, and so where the risk sits.

They look for three things:

• A second line. People below you who actually run a function, not just employees who carry out tasks.
• No empty boxes. Every important function has a name. If "sales" and "finance" both point to you, they notice.
• No irreplaceable person. If one person runs the shop, purchasing and scheduling, that's another bottleneck. Our article on key employee dependency explains why it matters as much as owner dependency.

In many small businesses, the real org chart looks like a wheel: the owner at the hub, everyone around the rim. A buyer wants to see a pyramid, even a small one.

The four functions to cover

A business with $1.5M to $20M in revenue doesn't need a big-company structure. But four functions need a clear owner other than you:

1. Sales and clients. Who holds the big accounts, who prepares quotes, who handles complaints.
2. Operations. Who schedules production or jobs, who manages quality, who buys.
3. Finance. Who watches cash flow, who invoices, who follows up on receivables, who talks to the bank.
4. People. Who hires, who trains, who manages schedules and conflicts.

In a smaller company, one person can hold two functions. What matters is that it isn't always you.

The role sheet: the document that counts

The org chart shows the boxes. The role sheet says what's inside them. It's the document that turns a title into real responsibility, and it's a central piece of step 5 of the path.

A good role sheet fits on one page and answers six questions:

• Purpose of the role: in one sentence.
• Responsibilities: five to eight, each starting with a verb.
• Decisions the person makes alone: with limits (dollar amount, client type, allowed discount).
• Decisions made after consulting: and with whom.
• Indicators: two to four results they're judged on.
• Backup: who steps in during an absence.

The decisions line is the most important. It's what stops everything from coming back up to you. Our article on the decisions that always come back to the owner shows how to set those limits.

An example in the Quebec City region

A case invented for illustration: a commercial moving and storage company in Quebec City. Three and a half million in revenue, 35 employees in peak season, contracts with offices, institutions and property managers. The owner is 60.

On paper, there's a head dispatcher, an administrative assistant and two crew leaders. In reality, everything goes through the owner: quotes, spring hiring, client claims, truck purchases.

He first draws the real org chart, the one that shows who actually decides. The result surprises him: eleven arrows lead to him. Then he draws the target org chart, three years out.

The head dispatcher becomes operations manager, with a role sheet that gives him scheduling, equipment maintenance and purchases up to a set amount, and seasonal hiring. The assistant becomes administration and finance manager, with invoicing, receivables and cash-flow tracking. For sales, someone is missing: he hires an account manager, then introduces him to clients one by one.

Two summers later, only three arrows still lead to him: the big contracts, the bank and strategic decisions. That second org chart is the one a buyer will want to see.

Your exercise for this week

Take a sheet of paper and do these five things:

1. Draw the real org chart: who actually decides, not who holds the title.
2. Count the arrows that lead to you.
3. Draw the target org chart, two or three years out, with a name in every box.
4. Spot the empty boxes: each one calls for a promotion, training or a hire.
5. Write the role sheet for the person who should take over the most of your decisions.

Once your role sheets are ready, link them to your procedures: each procedure names an owner, and that owner appears on the org chart. If that isn't done yet, start by learning to document business processes.

Where owners go wrong

• Drawing the dream org chart and calling it real. The buyer will talk to your employees. If the org chart says one thing and they say another, the buyer will believe the employees.
• Handing out the title without the authority. Naming an operations manager who still has to ask your permission for every purchase changes nothing. The role sheet has to give them real decisions, and you have to respect them.
• Creating positions for show. A buyer quickly spots a structure padded out just before a sale. Every box has to match real work.
• Forgetting backups. A role without a backup is still a risk. Name at least one person who can step in for each key function.
• Changing everything at once. People need time to grow into new responsibilities. Hand over one function at a time, then let it settle for a few months before the next.

Where it goes next

The target org chart and role sheets go straight into your Transition Document, in the section on the team. The successor sees who does what, who to retain first and who to lean on from day one. They'll also be used in the data room during due diligence.

Do it with a pro

Alone, it's hard to see the real org chart: you're at the hub of the wheel. With us and our regional partner, confidential interviews with your team reveal who really decides, and role sheets are written and validated with the people involved. Start with our free audit.

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