What Makes a Business Ready to Sell?
Exit readiness is not the same as wanting to exit. Buyers pay premium multiples — 3.5–5x SDE — for businesses that are operationally independent, financially clean, and structurally sound. Businesses that aren't ready sell at 1.5–2x or don't sell at all. The gap between a well-prepared exit and an unprepared one is typically 20–40% of total proceeds — often $200,000 to $1,000,000 in value left on the table.
The five dimensions of exit readiness: Financial Readiness (3 years of clean books, positive growth trend, healthy SDE margins), Operations Independence (the business runs without the owner — documented SOPs, capable management team), Market Position (diversified customer base, recurring revenue, no single client over 20% of revenue), Legal/Structural (transferable lease, clear IP ownership, no pending litigation, documented succession plan), and Timeline Alignment (enough runway to prepare properly — 2–4 years is optimal).
Owner dependency is the single largest value lever — and the hardest to fix quickly. If you are the primary salesperson, handle all key client relationships, and make every significant decision, buyers won't pay full price. They're buying risk. The fix takes 12–18 months: hire or develop a general manager, document every process as an SOP, and systematically transition client relationships to employees. Do this before hiring a broker, not after. Use RetireStack's Exit Timeline Planner to build the roadmap.