The exit readiness matrix

Value and readiness are different things. Both decide the outcome.

The idea

Value and readiness are different things. Both decide the outcome.

A valuable business is not automatically a sellable one. And a sellable business is not always worth what the founder needs.

The two questions have to be asked together.

You sell once. They buy for a living.

Every sale of a founder-led business is a negotiation between a first-timer and a professional. Each chapter of the playbook closes part of that gap.

Read the asymmetry

The figure

Value against transferability

HighValueLow

The trapped asset

Strong earnings, but the buyer cannot take them without you. Buyers will use earn-outs and long transitions.

What to do Twelve to twenty-four months of de-risking before market. Often the best return on time a founder will ever earn.

Ready

Target

Valuable and transferable. Go to market with a full process.

What to do Run a competitive process; the only question is timing.

The job

Owner-dependent and thin. The likely buyer is an individual or a small competitor.

What to do Build before selling, or accept a lifestyle-business price.

The platform seed

Well run but small. Attractive as an add-on to a larger buyer, or as a base to build on.

What to do Pursue strategic add-on buyers, or acquire to reach scale.

LowTransferabilityHigh

Value: Adjusted EBITDA, growth, margin, and position in the range.
Transferability: Can it run without you? Are the numbers clean? Do the licenses and contracts move?

How to read it

Businesses are placed by how much they are worth (vertical) and how easily a buyer can take them over (horizontal). The top-right corner is ready for market. Each other quadrant has a specific move.

The three P’s