The Sale-Readiness Scorecard

1.I know what I'll do after the sale, and my family supports it.

2.I know the after-tax amount I need from a sale, and I've worked it out with an advisor.

3.I could be away from the business for four weeks without results suffering.★ Key question

4.I'm prepared to stay through a transition of 6–24 months if a buyer needs it.

5.No single customer is more than 20% of revenue.★ Key question

6.My top ten customers together are less than 50% of revenue.

7.At least a third of next year's revenue is contracted, recurring or highly predictable.

8.My key customer relationships are held by someone other than me.

9.No major customer has left in the last two years without a clear reason I could explain to a buyer.

10.I have a #2 who has run day-to-day operations for at least 12 months.★ Key question

11.Key managers are likely to stay after a sale, and some have incentives to.

12.No single employee (other than me) would take critical customers or knowledge with them.

13.My books are accrual-basis and closed monthly within about 15 days.★ Key question

14.I have completed a sell-side quality-of-earnings (QoE) report. (Partly = engaged or in progress.)

15.Personal expenses are out of the business, or fully documented.

16.EBITDA has been stable or growing for three or more years.

17.I could list and document every add-back I'd claim.

18.Our key processes are written down or built into our systems.

19.Major contracts, leases and licenses can transfer to a new owner.

20.There are no unresolved legal, tax or environmental issues a buyer would find in diligence.★ Key question