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Exit Readiness Score

11 questions, about three minutes. An indicative read on how a buyer would see your business, using 11 of the 29 measures in our paid Exit Readiness Assessment.

No sign-up. Your answers stay in your browser unless you choose to send them.

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Advised by Leo Meggitt, Managing Director, Mastella Advisory

How it works

Buyers judge an owner-managed business on a fairly consistent set of questions: how much depends on the founder, whether there is a team they can back, how much of the profit they can rely on, whether the growth shows up in the numbers, and how cleanly the business will get through due diligence. This tool asks 11 of the 29 questions we use to score those five areas: the ones you can answer without looking anything up.

Each answer is placed in a band (strong, adequate, weak or critical) using thresholds we publish on how we score exit readiness. You get a score out of 100 overall and for each area, the weak measures ranked by how much they would cost you in a sale, and what a trade buyer and a private equity fund typically do about each one.

Estimates are fine. Where you don't know an answer, tick "Not sure": the result lists those separately, because a buyer will ask for every one of them.

25% of the score

Founder dependency

How much of the business walks out of the door if the founder does. The main driver of earn-out size, lock-in length and how much consideration is paid in cash at completion.

01Roughly what percentage of revenue comes from customers who would mainly call you, rather than someone else in the team?

Share of last-year revenue from customers where the founder is the primary relationship holder. Shared relationships count at 50%.

%
02In the last two years, what is the longest you have been completely unreachable, in working days?

Longest period in the last 24 months the founder was fully unavailable, in working days, and whether anything material went wrong.

working days

20% of the score

Management depth

Whether a team exists that a buyer can back. Sets how much of the founder's role a buyer has to replace, and whether an MBO or EOT route is realistic.

03If you had to step away for six months starting tomorrow, who would run the business?

Whether a named individual could run the business for six months starting tomorrow.

04Who runs your finances day to day?

Strength of the finance function.

25% of the score

Earnings quality

How much of reported profit a buyer will actually underwrite. Drives the EBITDA the multiple is applied to, and whether price is paid on the latest year or an average.

05Roughly what percentage of revenue is under a recurring contract or multi-year agreement?

Share of last-year revenue under a recurring contract or a multi-year or framework agreement.

%
06What percentage of last year's revenue came from your largest customer?

Largest single customer as a share of last-year revenue.

%
07Of the profit figure you would present to a buyer, how much comes from adding back one-off or owner costs, as a percentage?

Total normalisation adjustments as a share of reported EBITDA for the last year.

%

15% of the score

Growth evidence

Whether the growth story is supported by evidence. Buyers pay for growth they can see in the data, and discount growth that only appears in the plan.

08Of last year's customers, roughly what percentage of their spend did you keep this year?

Gross revenue retention. Last-year revenue from prior-year customers, capped at each customer's prior-year spend, as a share of prior-year revenue.

%
09Which best describes your price increases over the last two years?

Record of price increases over the last 24 months.

15% of the score

Due diligence readiness

How quickly and cleanly the business can get through a buyer's due diligence. Weak readiness costs time, fees and price chips late in the process when the founder has least leverage.

10How many working days after month end do you have final monthly numbers?

Working days after month end until the management accounts are final.

working days
11What goes into your monthly management pack?

Content of the monthly management pack.

0 of 11 answered

FAQ

Exit Readiness Score: FAQs

Is the Exit Readiness Score free?

Yes. There is no sign-up and no email needed to see your result. Your answers are scored in your browser and are only sent to Mastella Advisory if you choose to send them.

How is the exit readiness score calculated?

Each of the 11 answers falls into one of four bands (strong, adequate, weak or critical) using published thresholds. Bands convert to a score out of 100, averaged within five areas weighted as follows: founder dependency 25%, management depth 20%, earnings quality 25%, growth evidence 15%, due diligence readiness 15%. Within their areas, founder-held revenue, successor readiness, largest customer count for more than the other measures.

What is a good exit readiness score?

75 or more is strong, 50 to 74 adequate, 25 to 49 weak and below 25 critical. The overall number matters less than the individual measures: a single critical score on a measure such as founder-held revenue or the largest customer's share of revenue can change the deal structure on its own.

How accurate is a self-assessed exit readiness score?

It is an indicative read based on your own answers to 11 of the 29 measures we use. The paid Exit Readiness Assessment covers all 29 and checks each answer against your accounts, your customer data and interviews with your senior team.

Who is the Exit Readiness Score for?

Owners of UK owner-managed businesses thinking about a sale, a management buyout, an employee ownership trust or outside investment in the next few years. The thresholds were set with businesses worth roughly £5M to £50M in mind, but the measures apply to smaller businesses too.

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