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Home › Exit Planning & Selling › Education & Advice › Selling A Business › Self Assessment Checklist

Is Your Business Ready for Sale? - A Self Assessment Checklist

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This Self Assessment Checklist will help you assess how "ready for sale" your business is. Use the checklist to see how well positioned your business is to sell for maximum value, and to identify areas for improvement.

Naturally, no business will score well in all areas, and there is likely still value in your business even if you have poor grades on many dimensions. Improving your checklist grades will lead directly to increases in value. The most critical factors are bolded.

Source of Value	Assessment Checklist	Grade (A-F)

Financial Performance	Strong Sellers Discretionary Earnings or "SDE" Earnings consistent and strong in most recent periods High gross and net margins Sales growing, or at least not declining

Books and Records	Vast majority of SDE is provable on tax returns Discretionary expenses are moderate percentage of SDE, classified in appropriate categories on tax returns, verifiable as discretionary and document with receipts

Owner	Not dependent on owner’s unique skills or relationships Owner willing to finance part of the sale Owner willing to sign 5 year non compete Owner willing and able to train buyer during transition and possibly after the sale

Lease	If location dependent (e.g., retail or restaurant), favorable, long term lease in place or available from landlord

Team	Strong, complete management team, excluding owner/ owner’s family, in place and willing to stay after the sale Full staff of well trained, experienced employees Employee turnover is low, tenure is high Non union Employee relations are good, and ideally earning well above minimum wage Owner working reasonable hours, able to take vacations Strong employee "systems" in place (recruiting, benefits, incentive plans, etc.)

Customers	Diversified customer base, not heavily dependent on a few customers Long term relationships, low customer churn, ideally under contract Strong repeat business, ideally regularly recurring revenues High and growing (or at least flat) market share Customer satisfaction high

Systems and Intellectual Property	Comprehensive and well documented systems, including business, operational, marketing, and administrative plans/ systems Intellectual property, copyrights, patents No material legal or tax problems

Products/Services	High quality products and services Differentiated and/or branded

Barriers to Entry	Exclusives rights to products, services, territory, etc. Difficult to obtain licenses/permits that are transferable to buyer Quality or cost advantages vs. competitors High "switching costs" (substantial cost or effort for customers to leave you for a competitor) Exclusive partnerships with related market leading companies

Facilities & Equipment	Up to date, well maintained facilities, capital equipment and technology Capacity for expansion

Suppliers	Strong supplier relations Exclusive rights Alternative suppliers available

History/ Reputation	Many years established and under current ownership Excellent reputation High company/brand awareness

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VR offers a seminars for Hawaii business owners on the following topics:

Selling for maximum value
Exit planning
How to Earn More While Working Less