Exit planning is not a one-time event. It’s a business transition process that requires owners to align personal and financial goals with the company’s future. According to the Exit Planning Institute, more than 75% of owners intend to exit within the next decade, yet most lack a written plan. That gap often leads to lower valuations, chaotic closings, and even regret.
This exit readiness checklist gives you 15 critical checks to ensure your company is prepared for a successful transition, whether through a third-party sale, private equity investment, or family succession.
Exit readiness starts with you. What lifestyle do you want post-exit? How much wealth will you need to support it? Clear personal and financial goals anchor the entire exit planning process.
(Learn more about setting goals in the Exit Planning Starter Kit).
Do you know the difference between enterprise value and equity value? Enterprise value is the total worth of your business operations; equity value is the slice left after debt. Benchmarking both helps owners understand what a buyer will actually pay and what lands in their pocket.
The value gap is the shortfall between your company’s current valuation and the amount you need to reach your “freedom point.” Tracking it quarterly makes progress visible and motivates leadership to build transferable value.
Owners who map a 3-, 5-, or 10-year exit timeline have a higher chance of maximizing value. A timeline sets milestones for leadership succession, capital improvements, and transition planning.
Explore a detailed exit timeline roadmap.
A successful business is one that runs without the owner. Strengthen your bench with a COO, CFO, and sales leader who can drive growth independently. Buyers pay more for businesses with next-level leadership.
Ask yourself: Could the company operate for 30 days without you? If not, it’s time to delegate client, vendor, and employee responsibilities. Lower owner dependence makes the company far more attractive to potential buyers.
Formal operating procedures and KPI dashboards are essential. Systematized processes prove the business can scale, and they minimize disruption during a sale process.
Clean, timely financial reporting builds buyer confidence. Aim for GAAP-compliant statements, external CPA reviews, and monthly closes. Consistent reporting reduces diligence risks and keeps negotiations on track.
If a handful of accounts drive most revenue, you’re vulnerable. A strong business transition requires a broad, recurring customer base that demonstrates resilience. No single client should represent more than 15% of total revenue.
Subscription contracts, service agreements, and long-term vendor deals create predictable income. Buyers and investors value consistency, making recurring revenue one of the most powerful exit planning drivers.
Does your company stand out? A documented strategic plan that shows differentiation, IP protections, or long-term contracts boosts valuation multiples and enhances readiness for a successful exit.
Even if you’re not selling soon, succession planning is critical. Whether the transition is to family members, key employees, or outside investors, having leadership trained and ready ensures business continuity.
A strong exit planning transition team usually includes a CEPA-certified advisor, CPA, attorney, and financial advisor. Together, they quarterback the process, align stakeholders, and protect value.
See the exit planning glossary for a full definition of Transition Team.
Every exit plan involves tax consequences. Work with your CPA and attorney to model different deal structures (asset vs. stock sale, ESOP, management buyout). Proactive planning maximizes after-tax proceeds.
Exit readiness isn’t static. Conduct a formal assessment each year to evaluate governance, operations, market positioning, and personal readiness. Use a scoring model to stay accountable and continuously prepare the business for transfer.
| Completed | Action Item |
|---|---|
| ☐ | Personal and financial goals defined |
| ☐ | Enterprise vs. equity value benchmarked |
| ☐ | Value gap identified and tracked |
| ☐ | Exit timeline mapped (3–10 years) |
| ☐ | Strong management team in place |
| ☐ | Owner dependence reduced |
| ☐ | Systems and SOPs documented |
| ☐ | Financial reporting strengthened |
| ☐ | Customers diversified |
| ☐ | Recurring revenue secured |
| ☐ | Competitive advantage clarified |
| ☐ | Leadership succession planned |
| ☐ | Transition team assembled |
| ☐ | Tax implications modeled |
| ☐ | Annual exit readiness assessment complete |
Exit readiness is the state of being personally, financially, and operationally prepared for a business transition, ensuring the company remains valuable without the owner.
Ideally, 3–5 years in advance. Early transition planning gives owners more options and maximizes transferable value.
Typically a transition team of advisors including a CEPA, CPA, attorney, and financial planner. They align around one plan to achieve a successful transition.