Exit Readiness

Why this questionnaire is useful

This questionnaire gives you an evidence-based view of how a buyer will perceive the company before due diligence begins. It highlights value risks early, aligns shareholders and management around priorities, and converts a broad exit ambition into a focused preparation plan. Used periodically, it also provides a measurable record of progress toward a transaction.
Your benefits: clearer valuation and readiness discussions; fewer diligence surprises; stronger management accountability; better timing decisions; improved negotiating leverage; and a practical list of actions that can protect value and transaction certainty.

How to score

Score every line item from 1 to 10 using current evidence: 1–2 = absent/critical gap; 3–4 = weak/ad hoc; 5–6 = partly developed; 7–8 = strong with minor gaps; 9–10 = buyer-ready and consistently evidenced. Add comments where useful. Section scores are equal-weight averages of their line items; the overall score is the equal-weight average of the six section scores.

Contact details

Company

Owner's full name

E-mail address

1. Exit readiness (company) — main questionnaire

Purpose: identify areas where the company is not yet prepared for a sale process. Score each area based on current evidence: 1–2 = not ready / critical gap; 3–4 = low readiness / ad hoc actions; 5–6 = partially ready / incomplete solutions; 7–8 = high readiness / minor gaps; 9–10 = fully ready / buyer-ready standard. If in doubt, select the lower score and add a comment or required action.

Rate readiness on a scale of 1–10, where 10 indicates the highest level of readiness. A comment is optional.

ID	Founder assessment question	Evidence / points to consider
1. Financial Readiness
F01	Do you have 2–3 years of audited or independently reviewed financial statements?	Audited preferred; statements should reconcile to management accounts.
F02	Is the accounting clean, current, and fully reconciled?	Bank, tax, receivables, payables, inventory, and intercompany balances.
F03	Can you provide a credible EBITDA bridge with support for every adjustment?	Normalisations, one-offs, owner benefits, and exceptional items.
F04	Do you produce a cohesive monthly management reporting package?	P&L, balance sheet, cash flow, working capital, and KPIs.
F05	Do you maintain an annual budget / 2-5 year forecast model with explicit, testable assumptions?	Integrated forecast with sensitivities and a clear link to historical performance.
2. Operational Readiness
O01	Are critical operating processes documented and repeatable?	Production, quality, sales, procurement, service delivery, and controls.
O02	Are relevant KPIs measured consistently and reviewed by management?	Definitions, owners, targets, trends, and corrective actions.
O03	Is there a clear organisational chart with defined responsibilities?	Decision rights, reporting lines, role descriptions, and accountability.
O04	Can the business operate effectively without day-to-day founder involvement?	Limited key-person dependency in operations and commercial relationships.
O05	Are inventory and production planning accurate and controlled?	Forecasting, stock accuracy, obsolete inventory, scheduling, and traceability.
O06	Is capacity understood and supported by a realistic capex roadmap?	Current utilisation, bottlenecks, maintenance backlog, and growth capex.
3. Commercial Readiness
K01	Is the company’s market positioning and competitive advantage clear and defensible?	Customer proposition, differentiation, market evidence, and barriers to entry.
K02	Is customer concentration understood and actively managed?	Revenue, margin, contract duration, churn risk, and mitigation by customer.
K03	Are margins and pricing drivers transparent and actively managed?	Product/customer profitability, price discipline, inflation pass-through, and mix.
K04	Is there a credible, quantified organic growth plan?	Pipeline, new products, markets, channels, capacity, owners, and milestones.
K05	Have realistic client acquisition or partnership opportunities been assessed?	Strategic rationale, targets, integration capacity, and funding considerations.
K06	Can management clearly explain the equity story and “Why now?”	Compelling investment case supported by evidence and a credible timing rationale.
4. Legal & Compliance Readiness
P01	Is corporate housekeeping complete and up to date?	Shareholder documents, board resolutions, registers, filings, and authorities.
P02	Have material customer, supplier, lease, and financing contracts been reviewed?	Change-of-control, termination, exclusivity, liabilities, and consent requirements.
P03	Is ownership of all material intellectual property clear and documented?	Assignments, licences, trademarks, software, know-how, and employee-created IP.
P04	Are employment documentation and HR practices compliant?	Contracts, incentives, pensions, disputes, policies, and contractor status.
P05	Are all material regulatory, quality, safety, and environmental requirements met?	Permits, certifications, inspections, incidents, remediation, and sector rules.
5. Strategic Readiness
S01	Has a prioritised universe of credible strategic buyers been developed?	Strategic fit, geography, appetite, synergies, and ability to execute.
S02	Have relevant private equity investors and financial buyers been mapped?	Investment criteria, cheque size, sector focus, portfolio fit, and track record.
S03	Is the company building visibility and relevant industry relationships?	Events, partnerships, suppliers, distributors, advisers, and thought leadership.
S04	Are relationships with potential acquirers being developed appropriately?	Early, discreet engagement without compromising confidentiality or leverage.
6. M&A Process Readiness
MA01	Is there a realistic 12–36 month preparation and transaction timeline?	Workstreams, milestones, dependencies, owners, and decision gates.
MA02	Is a well-structured data room substantially prepared?	Financial, commercial, legal, tax, HR, operational, and compliance materials.
MA03	Have suitable M&A, legal, tax, and other advisers been identified?	Relevant experience, conflicts, scope, fees, references, and working model.
MA04	Have transaction and personal tax implications been assessed?	Structure alternatives, timing, reliefs, exposures, and shareholder circumstances.
MA05	Is succession planning integrated with the proposed transaction?	Leadership continuity, retention, handover, founder availability, and buyer needs.
MA06	Is there a controlled internal and external communication strategy?	Employees, customers, suppliers, lenders, media, confidentiality, and timing.

2. Dependency mapping (from founder) — sub-questionnaire

Purpose: identify where the company still relies on the founder and convert those dependencies into a practical continuity and succession action plan. Score readiness from 1 to 10: 1 = fully founder-dependent / no effective substitute; 10 = independently managed, documented, transferred, and tested.

Rate readiness on a scale of 1–10, where 10 indicates the highest level of readiness. A comment is optional.

ID	Founder dependency question	Evidence / points to test
1. Founder-independent decision-making
D01	Are operational decisions routinely made without the founder’s approval?	Evidence: delegated authority limits, decision logs, role mandates, and examples of independent decisions.
D02	Can commercial pricing, customer terms, and contract decisions be approved without the founder?	Evidence: pricing policy, approval matrix, delegated limits, and recent transactions.
D03	Can financial, hiring, procurement, and capex decisions proceed without the founder?	Evidence: budgets, signatory matrix, HR authority, procurement limits, and capex governance.
D04	Do employees and external stakeholders know who has authority when the founder is absent?	Evidence: organisation chart, communications, escalation paths, and deputies.
2. Management depth and succession
KAD01	Is there a credible individual or leadership team capable of assuming the founder’s core responsibilities?	Evidence: named successors, track record, scope currently owned, and board confidence.
KAD02	Are management capability gaps documented with owners and target completion dates?	Evidence: skills matrix, succession plan, recruitment, training, and coaching actions.
KAD03	Are second-line managers cross-trained for critical roles?	Evidence: deputy coverage, job rotation, documented handovers, and absence tests.
KAD04	Are key managers appropriately incentivised and likely to remain through a transition?	Evidence: retention risk assessment, incentives, contracts, and development plans.
3. Founder role transition
R01	Is the founder’s target role after transition explicitly defined?	Evidence: written role covering operational, commercial, strategic, advisory, and governance duties.
R02	Is there a phased timetable for transferring the founder’s responsibilities?	Evidence: activities, recipients, milestones, decision rights, and completion dates.
R03	Are founder availability, remuneration, authority, and exit conditions agreed in principle?	Evidence: term outline, reporting relationship, time commitment, and duration.
R04	Has the proposed future role been tested with management and key shareholders?	Evidence: alignment discussions, concerns raised, decisions, and unresolved issues.
4. Emergency continuity
A01	Is there a documented plan for founder illness, incapacity, or sudden departure?	Evidence: continuity plan, named interim leader, activation criteria, and first 72-hour actions.
A02	Can authorised people access critical bank, legal, IT, insurance, and operational systems?	Evidence: signatories, powers of attorney, credentials protocol, backup access, and testing.
A03	Are emergency communications prepared for employees, customers, suppliers, lenders, and advisers?	Evidence: contact lists, message templates, communication owners, and sequencing.
A04	Has the business tested founder absence for a meaningful period?	Evidence: simulation or actual absence, issues identified, corrective actions, and retest.
5. Knowledge and relationship transfer
W01	Are the founder’s critical activities, know-how, and recurring decisions documented?	Evidence: dependency register, process maps, calendars, procedures, and decision principles.
W02	Are founder-owned customer, supplier, lender, and adviser relationships assigned to additional owners?	Evidence: relationship map, introductions, joint meetings, CRM ownership, and handover status.
W03	Are critical files, contracts, passwords, contacts, and institutional knowledge stored centrally?	Evidence: controlled repository, access rights, backups, ownership, and update process.
W04	Is progress in removing founder dependencies measured and reviewed regularly?	Evidence: dependency KPIs, review cadence, action owners, deadlines, and closure evidence.
6. Family, ownership and governance alignment
L01	Are family and shareholder objectives for ownership, control, liquidity, and legacy explicitly aligned?	Evidence: documented preferences, meeting records, agreed principles, and differences.
L02	Are governance bodies, reserved matters, and decision rights clear for the transition period?	Evidence: board structure, shareholder agreement, family council, and authority matrix.
L03	Is there a process for resolving family or shareholder disagreement?	Evidence: escalation route, mediation mechanism, voting rules, and trusted advisers.
L04	Is there a coordinated stakeholder communication plan for succession or sale?	Evidence: audiences, confidentiality, messages, timing, spokespersons, and approvals.