“Maybe this is the year I sell.”
You’ve built something real.
The business is profitable.
You have a team.
And if you’re honest, you’re tired of the daily grind.
Part of you wants to see what you could do with the proceeds.
Part of you wants optionality.
Part of you just wants to know what this thing is actually worth.
So the question naturally follows:
Am I ready?
Most owners answer that question by looking at revenue, margins, and growth.
If those look good, they conclude: “Yeah, we’re probably ready.”
That assumption is why so many owners enter a sales process confident — and leave it realizing they’re five years away from being ready.
Not because the business isn’t good enough.
But because readiness doesn’t mean what they think it means.
What “Exit Ready” Actually Means to a Buyer
Before you can answer whether you are ready, you need to understand what buyers mean by ready.
Most owners believe exit readiness is about performance.
Bigger numbers = better business = higher valuation.
That logic is intuitive.
And wrong.
From a buyer’s perspective, exit readiness is about predictability and sustainability.
They’re asking questions like:
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Can I reliably extract the value being claimed?
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Will this business continue to perform after the owner steps away?
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How much risk am I taking on during and after the transition?
Here’s the uncomfortable truth: A highly profitable business that depends on the owner is riskier than a modestly profitable business that runs without them.
The first is a person.
The second is a business.
Buyers want to buy businesses — not people wearing a business like a suit.
So readiness isn’t primarily about how much money your company makes today.
It’s about how much money it will continue to make without you.
That requires a completely different way of evaluating your business.
The Five Dimensions Buyers Actually Evaluate
When buyers assess exit readiness, they’re not looking at one thing.
They’re auditing five distinct dimensions.
You need to be strong in all five — because buyers discount your valuation based on your weakest one.
1. Financial Clarity
Buyers expect clean, accurate, and intelligible financials — not just a P&L.
They want to quickly understand:
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Cash flow
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Customer profitability
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Margins by product or service line
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Working capital needs
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Unit economics
If the numbers don’t reconcile, if explanations live only in your head, or if variance can’t be clearly explained, readiness drops immediately.
A buyer should be able to open your books and understand the business without you narrating it.
2. Operational Independence
This is the single most common deal killer.
The question here is simple:
Can the business function without you?
Buyers look at:
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Who actually closes deals
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Who owns key customer relationships
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Where decisions get made
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How new employees ramp
If execution still funnels through you — even subtly — the business carries “owner replacement risk,” and buyers price that risk aggressively.
3. Customer Stability & Quality
Buyers aren’t buying your past revenue.
They’re buying your future revenue.
They want to know:
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Will customers stay post-sale?
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Are relationships tied to the company or to you personally?
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Is revenue concentrated in a few accounts?
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Are customers expanding, stable, or contracting?
A business with loyal, diversified, expanding customers is far more valuable than one with great margins but fragile relationships.
4. Market Position & Defensibility
This is about how exposed you are to competition.
Ask yourself honestly:
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Can you defend pricing?
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Would customers stay if a well-funded competitor entered your market?
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Do you have switching costs, brand pull, proprietary capabilities, or structural advantages?
“Great service” and “strong relationships” are table stakes — not defensibility.
Defensible businesses command higher multiples because they’re simply less risky.
5. Team & Culture
This dimension is often invisible until it’s too late.
Buyers evaluate:
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Whether the team can operate and think strategically
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Whether key people will stay through a transition
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Whether leadership depth exists beyond the owner
If employees stay because of you, that’s a problem.
If they stay because of the mission, culture, and opportunity — that’s value.
Why Most Owners Aren’t As Ready As They Think
This is what we see repeatedly.
An owner says: “Revenue is up 20%. Margins are strong. We have a good team. We’re ready.”
All true.
And mostly irrelevant.
When we dig deeper:
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The owner still closes major deals
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Financials are accurate, but only the owner understands the story
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Customers are loyal — to the owner
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The team executes well, but doesn’t think strategically
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There’s no real defensibility beyond responsiveness and relationships
The business isn’t unready because it’s weak.
It’s unready because it hasn’t been built for someone else to own it.
That’s not a failure — it’s normal.
Most businesses are built around the owner because that’s how you grow fast with limited capital. Over time, success becomes dependent on the very person who wants to exit.
That transition doesn’t fix itself.
It requires deliberate, systematic work.
The Five-Part Exit Readiness Self-Assessment
This is where clarity starts.
Rate yourself from 1 to 10 on each dimension — honestly, not aspirationally.
This is essentially what buyers will do anyway.
Financial Clarity
If an outside CFO stepped in tomorrow, how quickly could they understand:
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Unit economics?
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Most profitable customers?
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Cash flow dynamics?
Most owners are a 6 or 7.
An 8 or 9 means instant clarity without explanation.
Operational Independence
Quantify how much the business still runs through you:
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Deals you close
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Relationships you manage
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Decisions that escalate to you
If it’s “quite a few,” you’re likely a 4 or 5.
A truly independent operation is a 7+.
Customer Stability
Look at real data:
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Annual churn
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Customer longevity
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Revenue concentration
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Expansion vs contraction
Churn under 10% usually signals strength.
15%+ is a warning.
Market Defensibility
If a strong competitor showed up tomorrow:
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Could you defend share and pricing?
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Or would you compete on relationship and price?
If you can’t articulate clear advantages, you’re likely a 4 or 5.
Team & Culture
Ask key employees:
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What would happen if I left?
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What makes this place special?
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Where is the business going?
If answers revolve around you, you’re not ready.
If they revolve around the work and future, you’re closer.
Your Exit Readiness Score
Add your five scores together (out of 50).
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40+ → Close to exit-ready.
Likely 6–12 months from a premium process. -
30–39 → Partially ready.
12–24 months of focused work required. -
Below 30 → Not exit-ready yet.
A realistic 24–36 month roadmap is needed.
Most owners are shocked by their score.
The business feels ready.
But from a buyer’s perspective, it’s still too dependent on them.
That realization isn’t bad news.
It’s clarity.
What To Do With Your Results
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40+: Push your weakest dimension from a 7 to an 8. You’re in final prep mode.
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30–39: Make your lowest dimension your primary project for the next year.
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Below 30: Build a three-year roadmap. Improve your weakest dimension by three points in year one.
Readiness is not luck.
It’s not market timing.
It’s systematic work.
The Bigger Picture
Most owners wait until the final year before a sale to “get ready.”
They scramble.
They rush documentation.
They clean up numbers under pressure.
The owners who command premium valuations do the opposite.
They prepare early.
They know where they stand.
They finish the work before talking to buyers.
This assessment is the starting point.
You may not like your score — but now you know.
And once you know, you can build a real plan.
Ross Armstrong
Co-Founder, Pillar Optimization Partners
We help owner-led businesses move from “feels ready” to “actually ready” by systematically strengthening all five dimensions of exit readiness.
If you want an honest readiness score and a realistic timeline for your business, we can walk through an Exit Readiness Audit together.