Blog · Exit Planning

Exit Readiness Checklist

ExitClarity · April 3, 2026 · 3 min read

Why a Checklist Isn't Enough — But Where to Start

A checklist can't replace a structured assessment. But it can give you a fast read on where the obvious gaps are — and whether you're likely to be surprised in a sale process.

Work through each section honestly. If you can't answer a question with confidence, that's a signal.

Financial Readiness

• Do you have 3 years of clean, consistent financial statements (P&L, balance sheet, cash flow)?
• Are your financials prepared or reviewed by an outside accountant?
• Have you separated personal and business expenses completely?
• Can you calculate your normalized EBITDA — with documented, defensible add-backs?
• Is your revenue recognition consistent and documented?
• Do you have a clear picture of working capital requirements?
• Have you reviewed your tax returns for the last 3 years for consistency with your financial statements?

Operational Maturity

• Are your core business processes documented in written SOPs?
• Could a new operator understand how to run your business from your documentation alone?
• Do you have defined roles, responsibilities, and organizational structure?
• Are your technology systems and software subscriptions documented and transferable?
• Are vendor relationships formalized in contracts — not dependent on personal relationships?

Business Continuity and Owner Dependency

• Can your business operate for 30 days without your direct involvement?
• Do you have a management team capable of running day-to-day operations post-close?
• Are key customer relationships maintained by your team — not exclusively by you?
• Is institutional knowledge documented — not stored exclusively in your head?
• Do you have key man insurance in place?

Revenue and Customer Quality

• Does any single customer represent more than 15–20% of revenue?
• Is your revenue recurring, contracted, or relationship-dependent?
• Are your customer contracts written and transferable to a new owner?
• Have you analyzed customer retention and churn over the past 3 years?

Legal and Structural Readiness

• Is your IP (trademarks, patents, proprietary processes) documented and owned by the company — not by you personally?
• Are employee agreements, non-competes, and confidentiality agreements in place and enforceable?
• Is your entity structure (S-Corp, C-Corp, LLC) reviewed for sale optimization?
• Are there any outstanding litigation, liens, or contingent liabilities a buyer would find?
• Are your cap table and ownership records clean and up to date?

Personal and Exit Goal Readiness

• Do you know your financial number — the after-tax proceeds required to fund your post-exit life?
• Have you modeled the tax impact of a sale at your expected valuation?
• Do you have a clear sense of what you want post-exit — another venture, retirement, advisory work?
• Are your family members or partners aligned on the decision to sell?
• Have you thought through what a post-close employment or earnout period would look like?

Deal Structure Awareness

• Do you understand the difference between an asset sale and a stock sale — and the tax implications?
• Do you understand how earnouts work and when they're used?
• Do you know what working capital adjustments are and how they affect net proceeds?
• Do you have a CPA and attorney who have done M&A transactions before?

What to Do With Your Results

If you found significant gaps — particularly in financial quality, owner dependency, or customer concentration — those are your highest-priority items to address before engaging a banker or advisor.

See also: what exit readiness means, how to prepare your business for a sale, and the valuation mistakes most owners make.