Most business owners get one shot at selling their business. The preparation that happens in the 12 to 36 months before a sale determines not just whether the sale succeeds, but the price it achieves. This checklist covers the five areas that sophisticated buyers examine most closely — and where unprepared sellers leave the most value behind.
Two engineering consultancies. Identical revenue. Identical IP documentation. One received a $380,000 higher offer. The difference was not what the business owned. It was whether the business could operate independently of the founder who built it.
How to Use This Checklist
Work through each section honestly. A checked item is an area of strength. An unchecked item is both a risk and an opportunity — addressing it before going to market directly increases the price you can command.
Section 1: IP Documentation and Protection
- All trademarks are registered and currentName, logo, and any distinctive taglines are registered with IP Australia. Renewals are tracked and up to date.
- Core operational systems are documentedKey processes are written down in enough detail that a new operator could follow them without asking the founder.
- An IP Asset Register exists and is currentAll intellectual property assets — systems, brand elements, customer data, proprietary methods — are recorded in a single register.
- IP ownership is clearly assigned to the businessAll IP created by employees and contractors is formally assigned to the company via written agreements. No personal IP is mixed with business IP.
- Confidential information is protected by NDAsEmployees, contractors, and key suppliers have signed confidentiality agreements. Trade secrets are identified and protected.
Section 2: Founder Independence
- The business can operate for 4+ weeks without the founderThere is documented evidence that the business can run without founder involvement in daily operations.
- Decision-making authority is distributedKey decisions in operations, client service, and finance do not require founder sign-off for day-to-day function.
- Management capability exists below founder levelAt least one person in the business can lead operations independently. This person is documented in the organisational structure.
- The founder's role is defined and boundedThere is a clear, written description of what the founder does — and what the business does without them.
Section 3: Client Relationships and Revenue Quality
- Client relationships are held by the business, not the founderClients have meaningful relationships with team members beyond the owner. Client retention does not depend on the founder's personal involvement.
- Revenue is recurring or contractually committedA meaningful portion of revenue is under contract, subscription, or other recurring arrangement that survives a change of ownership.
- No single client represents more than 20% of revenueBuyer concentration risk is a common valuation discount. Diversified revenue is a premium signal.
- Client contracts are transferableKey client agreements do not contain change-of-control clauses that would void them on sale. Legal review has confirmed portability.
Section 4: Financial Clarity and Performance
- Three years of clean, reconciled financial statements are availableProfit and loss, balance sheet, and cash flow statements are prepared by an independent accountant and reflect the true trading performance of the business.
- EBITDA is clearly calculated and defensibleEarnings before interest, tax, depreciation, and amortisation is calculated consistently and any owner-specific add-backs are identified and justified.
- Personal expenses have been identified and normalisedAny personal costs run through the business are identified and added back to present a clean operating profit figure to buyers.
- Working capital requirements are understood and documentedThe buyer understands what working capital is required to operate the business from day one post-acquisition.
Section 5: Operations and Legal Readiness
- All licences, permits, and registrations are currentEvery regulatory requirement, industry licence, and government registration is up to date and transferable.
- Lease agreements have adequate term remainingProperty leases have sufficient term or renewal options to give a buyer confidence in operational continuity.
- Key staff agreements are in placeEmployment contracts exist for all key personnel. Non-compete and restraint clauses are appropriate and enforceable.
- There are no undisclosed disputes or liabilitiesAll known disputes, warranty claims, and contingent liabilities are identified and either resolved or disclosed.
Your score: Count your checked items. 16–20 checked: strong sale readiness, expect a premium outcome. 10–15 checked: targeted preparation will materially increase your sale price. Under 10 checked: 12–18 months of structured preparation is recommended before going to market.
The THINK IP Exit Ready Program works through each section of this checklist in depth over a 12-month engagement, building the documentation, structure, and narrative that commands a premium. Speak with Dr M to understand what your current position means for your expected sale price.