Business Exit Readiness Assessment

1.1 Strategic Plan: Is there a documented 3-5 year business or strategic plan that the leadership team actively follows?

1.2 Target Market: Is the ideal target market clearly defined, established, and understood by the entire organization?

1.3 Competitive Position: Do you have a clear understanding of your competition, your sustained competitive advantage, and your pricing power (margin)?

1.4 Barriers to Entry: Does the company possess strong, documented barriers to entry (e.g., proprietary processes, strong contracts, unique licenses) that competitors cannot easily replicate?

1.5 Growth Pipeline: Is there a visible, documented pipeline for future product/service development and market expansion that ensures future growth?

2.1 Advisory Structure: Does the company utilize a formal Board of Directors or an active Advisory Board for governance and accountability?

2.2 Senior Management Depth: Are there proven, capable leaders in key functional roles (Sales, Ops, Finance) who can run the business successfully without the owner's daily involvement?

2.3 Leadership Communication: Are company vision, goals, and performance metrics communicated transparently and consistently across the organization?

2.4 Corporate Culture: Is the company culture intentionally managed, documented, and consistently reinforced to attract and retain talent?

2.5 Management Succession: Is there a written, rehearsed plan for replacing key senior leaders, especially the owner, in the event of an unexpected exit?

3.1 Systemized Sales: Is the sales process documented, repeatable, and scalable (not relying on the founder's personality or contacts)?

3.2 Accurate Projections: Are sales projections consistently accurate (within a 10% variance) based on objective metrics and pipeline data?

3.3 Customer Diversity (Risk): Does your largest customer account for less than 10-15% of total revenue?

3.4 Recurring Revenue: Does a significant portion of revenue come from recurring contracts, service agreements, or predictable renewals?

4.1 Marketing Strategy: Is there a documented marketing strategy that clearly outlines channels, targeting, and key performance indicators (KPIs)?

4.2 Positioning & Branding: Is the market positioning (how the company is different) clear and consistently reflected in the brand identity?

4.3 Resource Allocation: Is the marketing budget managed to deliver measurable and predictable Return on Investment (ROI)?

5.1 Professional Oversight: Are financial statements prepared by a professional finance team (internal or external CFO/Controller)?

5.2 Financial Planning: Does the company regularly perform forecasting, budgeting, and variance analysis (FP&A)?

5.3 Internal Controls: Are internal controls (e.g., separation of duties for cash, inventory, payroll) documented and strictly followed to prevent fraud?

5.4 Clean Balance Sheet: Is personal or owner debt separated from business debt, and is working capital managed efficiently?

6.1 Litigation Risk: Are there minimal active or threatened legal claims that could create post-closing liabilities for a buyer?

6.2 IP Ownership: Is all key Intellectual Property (IP)—trademarks, patents, core software code—formally documented, registered, and owned by the company?

6.3 Standardized Contracts: Are customer, vendor, and employment contracts standardized, current, and easily accessible?

6.4 Compliance: Are all federal, state, and local licenses, permits, and tax filings current and compliant?

7.1 Modern Tech Stack: Are mission-critical software systems (CRM, ERP, Accounting) modern, integrated, and well-maintained (low "tech debt")?

7.2 Data Security: Are there documented policies for cybersecurity, data backup, and disaster recovery?

7.3 Data Ownership: Does the company fully own and control all key business data (customer lists, proprietary data, etc.)?

7.4 Vendor Independence: Is the company overly reliant on a single, expensive, or hard-to-replace IT vendor or consultant? (Lower reliance = higher score)

8.1 HR Documentation: Is there a comprehensive, up-to-date employee handbook and documented HR policies?

8.2 Legal Compliance: Are all employees and contractors properly classified (W-2 vs. 1099) to minimize compliance risk?

8.3 Key Employee Retention: Are there specific, non-owner incentives or strategies in place to retain top-performing non-management employees during a transition?

8.4 Compensation Structure: Is the compensation structure (salaries, commissions) formally documented and market-competitive?