Seven questions about how your business actually runs. You get a readiness score, the three things a buyer will question first, and what to do about them.
Takes about two minutes. No email needed to see your score.
Placed in one of four bands, from ready for a structured sale through to not yet.
Not only which ones are weak, but how many points each is costing you, so you know what to fix first.
Financial records, profitability, customer concentration, owner dependence, management, legal, growth and predictability, each with its own number.
What a buyer does about each weakness, how to fix it, and roughly how long that takes. Save it as a PDF.
The components are not weighted equally. Financial records carry the most, because everything else a buyer believes rests on whether your numbers can be traced. Predictability carries the least.
Four answers also cap the score regardless of everything else. A disputed shareholder register caps you at 49 even when the rest of the business is excellent, because a buyer cannot purchase what you cannot prove you own. That is not a quirk of the scoring. It is how a deal behaves.
Before a buyer discusses price, they establish whether your numbers can be trusted. Audited accounts are not required, but three consistent years are, and business and personal transactions have to be separate. Mixed records are the most common single reason a lower-middle-market deal collapses during the buyer’s examination.
Buyers pay a multiple of earnings they believe will continue. One strong year against two weak ones hands them the weak years as their baseline. Consistency is worth more than a single good result.
If one customer carries most of your revenue, a buyer is not acquiring your business, they are acquiring that relationship, and they know it can leave when you do. Above a quarter of revenue, expect questions. Above half, expect a lower price or a large part of it deferred.
A buyer is purchasing a business, not a job. The more it depends on you personally, the more of the price they hold back until you have transitioned out, usually as an earn-out tied to your continued presence.
With no management layer beneath you, a buyer inherits a company with nobody to run it. Their options are to install their own people or to keep you, and both reduce what they will pay.
Unclear title, an open dispute, expired licences or unsigned contracts stop a transaction at the point the buyer’s lawyers get involved, which is months into the process. Most are fixable in weeks if you start early, and expensive if a buyer finds them first.
Growth sets the multiple. A business with flat revenue is still saleable, but it is priced on what it earns today rather than on what it might earn later.
Revenue under contract is worth more than the same revenue won from scratch every year, because the buyer inherits certainty rather than a sales target.
Owners of established companies thinking about a sale in the next one to three years, and anyone who wants to know how large the gap is before spending money to close it. You see your score without giving us anything.
Seven questions, about two minutes, and a score you can act on.