Reference

What is exit readiness?

Exit readiness is whether a business could go through a buyer's due diligence today and come out with the price it hoped for. It is the buyer's diligence run in the mirror, early enough to fix or reframe what it finds.

A ready business can say who would buy it and why, and can pass the buyer's interrogation of the business itself. It already delivers the growth it is selling. It knows what the risk scan will find, and it could run a process next quarter.

Most businesses that want to sell can do one or two of those. The rest take time. So readiness starts a year or two before the sale, not the month the banker calls.

The usual sequence is the wrong way round. An owner decides to sell, appoints advisers, and the advisers write a story. Then the buyer's advisers take the story apart. The price follows what they find.

Readiness reverses that. Find everything first, while there is still time to change it.

What exit readiness is not

Readiness is not a valuation. A valuation says what the business is worth on its current evidence. Readiness asks what the evidence could be by the time a buyer looks, and what it would take to get there.

It is not the data room. The data room is the last step. A business that starts there has skipped the four that raise the price.

And it is not a tidy-up. Some of what a buyer finds can be fixed in a quarter. The things that move the price most take time to fix.

A forecast track record. A growth engine already in the numbers. A business that runs without its founder. So start early.

1. Who would buy this business, and why?

The first question is the equity story, answered from the buyer's side. Which types of buyer are likely: a trade acquirer, a fund, a competitor, a customer? What does each one pay for, and what does each one fear? A story written from the inside, "great people, loyal customers", answers none of that.

A ready business has two or three specific themes, with evidence, that every shareholder repeats. The themes fit what the priority buyers are trying to buy, and the business has started proving them.

Different buyers pay for different things.

A trade buyer pays for what it can add to its own business. That means your customers, your products, your sites, and the costs it can take out. It will want to see customer and product overlap. It will check how far the business depends on its current owners.
A private equity fund pays for a plan it can finance. It looks for recurring revenue, cash generation, a management team that stays, and growth levers it can back with capital.
A competitor pays for share and for removing a rival. It knows the market already, so it will test your numbers harder and your story less.
A customer or supplier pays to secure supply or a route to market. It cares about capacity, reliability and what happens to its own terms.

So one story will not do. Decide which two or three buyers matter most. Write the themes each one would pay for. Then start building the evidence for those themes now. A theme without evidence is a claim.

2. Would we pass the buyer's interrogation of the business?

A buyer's advisers spend most of their time on the second question. Are the segments the business plays in growing, provably, and by how much? Does it outgrow its market like for like, or grow with it? Are customers happy and coming back, and does anyone measure it?

What is the source of its advantage? Is anything stopping a new entrant? Some sellers cannot answer these with evidence a sceptical adviser would accept. The buyer then answers them, less generously.

As a seller, get ahead of those questions:

Build a specific fact base, segment by segment.
Show your growth against the growth of your segments, like for like, for at least three years.
Measure what customers think, through retention, repeat purchase and independent feedback.
Name the source of your advantage, and show it in share, margin or win rates.
Put the awkward facts on a page yourself, with your explanation. A buyer who finds them first will write a less generous one.

3. What growth are we selling, and have we started delivering it?

The third question is the plan. Does it follow from the record? Is it bridged driver by driver to the last three years, with the base year tested for one-offs?

Are the growth initiatives sized bottom-up, with owners, timing and cost? Has any of them started? Would they survive a buyer's scrutiny: realistic, sequenced, and deliverable without the current owners? If every initiative begins after the sale, the buyer prices the neglect.

To make the growth story stand up, a seller needs to:

Be clear on where growth has come from. Volume, price, mix, new customers, new sites.
Show that you deliver what you plan. A record of setting a strategy and hitting it is worth more than any forecast.
Be specific about where the next growth will come from. Market growth, share gains, or new products and markets. Size each from the bottom up, with an owner, a cost and a date.
Start now. Run pilots. Get the first results into the numbers before the sale.
Make sure the plan can be delivered without the current owners.

A plan that is already working is a premium. A plan that starts after the sale is a discount.

4. What will the buyer's risk scan find?

The fourth question is the mirror image of a buyer's red-flag week. Does concentration kill the deal: one customer that is the business, on a handshake? Does the business hit its forecasts? Can it produce the numbers a buyer asks for without the answer changing with who runs the report?

Does it know the true downside a buyer will model? Does it know the red flags diligence will surface: an unhappy large customer, a contract lapsing, a forecast miss mid-process? Is there a prepared answer for each: fixed, evidenced away, or disclosed with context?

Get there before the buyer does:

Pre-empt. Run the buyer's risk scan on yourself first, and list what it will find.
Fix what can be fixed. Put major customers on contracts. Move the main relationships off one person. Tidy the reporting so the numbers do not change with who runs the report.
For what cannot be fixed, prepare the answer. Know what you will say, with the evidence ready.
Disclose early, with context. A risk the seller raises is a fact. A risk the buyer finds is a finding, and it is priced.
Build the downside case yourself, before the buyer's advisers build a harsher one.

5. Could we run a process next quarter?

The fifth question is readiness in the narrow sense. Does the business know what would raise the price, and does the timetable allow it? Could it open a data room next month? Are the plan, the team, the timeline and the advisers lined up?

Can the business keep running while its senior people are absorbed by the process? Trading through a sale is the test most businesses fail quietly. A dip in the numbers mid-process is the most expensive event in a sale.

Whether the data room could open next month is a practice in the readiness area of a sell-side deal check. The five stages read:

Red flag: A data request would take a month and a prayer, and we couldn't name a large customer we'd let a buyer call.
Doubtful: The documents exist somewhere and assembly is unstarted; a list of friendly customers for buyer calls hasn't been thought about.
Unproven: A core pack is assembled, its currency uneven; a few large customers in mind as references, none asked.
Supported: Vendor DD done, gaps fixed, and a list of large, friendly customers briefed and willing to take a buyer's call.
Proven: Effectively always ready: reports agree with the story to the decimal, and the reference customers strengthen it on contact.

If the answer is to be yes, you will need these in hand:

Monthly management accounts by segment for three years, which agree with the story.
A core data room, assembled and kept current.
Vendor due diligence planned, with time to fix what it finds.
A short list of large, friendly customers who are briefed and willing to take a buyer's call.
A timetable, a deal team and advisers lined up.
A cover plan, so the business keeps trading while its senior people are absorbed by the sale.

The ways a seller falls short

Sellers fall short in recognisable ways.

A good, well-understood business that a buyer cannot separate from its owner.
A compelling equity story on a business that cannot pass the interrogation.
A clean, dependable business with no growth engine, and no reason to pay a premium.
A business where everything is true and nothing is assembled.
A strong story with a forecast the previous thirty slides do not support.
Owners who are not ready on any count, and not yet facing it.

Each has a different fix and a different lead time. So where the gap sits matters more than the score.

When to start

Twelve to twenty-four months before a process, in our experience. The first six months go on the things only time can fix. Bridge the plan to the record. Start the growth engine so it shows in the run-rate. Move the main relationships off one person and build a forecast track record.

The next six go on evidence: customer feedback, segment data, the downside case. The last months go on the data room, the advisers and the cover plan for senior people. A business that starts at the end does the last step only. The buyer's advisers do the rest.

Frequently asked questions

Do we need advisers before we are ready? Not necessarily, but they can help. A banker, seen early, can identify the likely buyers and what each will want to see.

Strategy advisers can help write the strategy down. They can also design and deliver a plan to raise the value of the business before the sale. No adviser can create a track record. The business does that work on itself, and it takes time.

What if the founder is the business? Then that is the first finding and the longest fix. A buyer will discount for it or walk. The only remedy is twelve months of visibly handing over customers, decisions and the numbers. It cannot be compressed.

What is vendor due diligence? Diligence the seller commissions on itself, before a buyer does. It covers the financial, legal, commercial and operational streams. Done well, nothing the buyer's advisers find is news. The seller has already decided how to answer it.

Does readiness raise the price, or just avoid a discount? Both. Avoiding the discount is the certain part. The buyer prices every red flag it finds first against the seller. The premium comes from the growth already in the numbers and a story the buyer's own diligence confirms.

Can we check readiness ourselves? Yes. The practices are written to be observable from inside the business. The owners usually know the honest answers already. The sell-side check puts them on one page and says which proofs are still missing.

Updated 2026-10-15.