Exit Readiness Checklist

Use this investor-grade checklist to see your company the way a buyer or private equity fund will. The more boxes you can genuinely check, the more leverage you will have when it's time to sell.

Treat this as a working document with your leadership team. For each item, mark yourself as Green (in place), Yellow (partially in place), or Red (not in place). The gaps become your value‑creation roadmap for the next 12–24 months.

Founder & Ownership Readiness

Buyers care about more than your numbers. They want a clean story around why you’re selling, what happens after you leave, and whether there will be drama post-close.

You have a clear personal target for net proceeds (after tax) and a realistic timeline for exit.
You can articulate—in one sentence—why you’re selling that doesn’t signal distress or desperation.
You’ve identified what you’ll do next (retire, invest, new venture) and your family is aligned.
You’re emotionally prepared to let go of day-to-day control of the business.
You understand typical deal structures (cash at close, earn-out, rollover equity, seller note).

Financial Clarity & Quality of Earnings

Premium buyers pay for clean, credible numbers. Sloppy books instantly compress multiples or kill deals.

Your financial statements are prepared or reviewed by a reputable CPA firm.
You have at least 3 full years of monthly P&Ls, balance sheets, and cash-flow statements readily available.
Revenue and expenses are recorded on an accrual basis, not purely cash.
Personal / non-business expenses are identified and can be cleanly removed as add-backs.
You can easily produce a schedule of normalized EBITDA with clear support for each adjustment.
No single customer or vendor relationship is “off the books” or tracked only in someone’s head.

Revenue Quality & Customer Concentration

Buyers don’t just look at how much you make, but how reliable and diversified those dollars are.

No single customer represents more than 20% of revenue—or you have a credible mitigation story.
You have written contracts or agreements for your top 10–20 customers, not just handshake deals.
You can break down revenue by segment, product line, and geography over the last 3 years.
You track key revenue metrics (retention, churn, LTV, new vs. existing customer mix).
Pricing is documented and not custom-negotiated by the owner on every major deal.

Operational Systems & Process

A scalable, process-driven operation signals to buyers that the business can grow without breaking.

Core workflows (sales, onboarding, service delivery, billing, collections) are documented in SOPs.
There is a single source of truth for work (project management, ERP, or similar system).
Key operational reports (capacity, backlog, utilization, cycle times) are produced at least monthly.
There is a documented vendor and inventory management process, where applicable.
Critical knowledge is not trapped in one or two long-tenured employees without backups.

Leadership, Team & Incentives

A buyer wants to know who is actually running the company on Monday after they wire the money.

There is a functional leadership team in place beyond the owner (ops, finance, sales, etc.).
Key managers have clear role descriptions, KPIs, and regular performance reviews.
Succession plans exist for at least the top 3–5 roles in the organization.
You have retention plans or incentives identified for key people post-transaction.
There are no toxic cultural issues or known ‘landmines’ (e.g., disgruntled partners, major HR disputes).

Legal, Contracts & Risk

Legal risk is a silent deal-killer. Cleaning it up in advance saves months in diligence and preserves value.

Corporate structure, ownership, and cap table are clearly documented and up to date.
You have signed copies of key contracts: customers, vendors, leases, and financing agreements.
There are no unresolved major legal disputes, audits, or regulatory investigations—or they are fully disclosed.
Intellectual property (trademarks, patents, software, brand assets) is owned by the company, not individuals.
You maintain appropriate insurance coverage (GL, E&O, cyber, key person where relevant).

Data, Reporting & KPIs

Sophisticated buyers expect to see the business through dashboards and data, not intuition and anecdotes.

You have a simple, reliable KPI dashboard for the business that is reviewed at least monthly.
Data is pulled from stable systems (accounting, CRM, operations tools), not stitched together in ad‑hoc spreadsheets.
You can quickly answer ‘What happened?’ and ‘Why?’ for the last 3–6 months of performance.
Historical data quality is strong enough to support trend analysis over at least 3 years.
Board / leadership packs are professional, consistent, and suitable to share with buyers with minimal cleanup.

Deal Readiness & Go-to-Market

When the time is right, you should be able to launch a process in weeks—not spend a year getting organized.

You have a clear view of likely buyer types (strategic, PE platform, PE add-on, searcher, management buyout).
You understand the range of multiples and structures currently seen in your industry.
Key diligence materials (financials, contracts, org chart, SOPs, KPIs) could be assembled into a data room within 30–60 days.
You have a preliminary narrative for your ‘equity story’—why this business will continue to win under new ownership.
You know which advisors you would call (M&A attorney, tax advisor, banker/broker) when you’re ready.