Most business owners receive their first honest assessment of exit readiness from the buyer's due diligence team — after the offer is on the table. At that point, every gap discovered is either a price reduction, a delayed settlement, or a deal that falls over. This scorecard is designed to give you that assessment now, while there is still time to act on what it finds.
Score each item honestly using the scale: 2 = fully in place, 1 = partially in place, 0 = not in place. A total score and interpretation appear at the end. The gap between your score today and the maximum is not just a number. It is a measurable dollar opportunity.
The practices that make a business sale-ready are exactly the same practices that make it sustainable, profitable, and enjoyable to run every day. Exit readiness is not a project you do at the end. It is a standard you set at the beginning.
Dimension 1 — IP Documentation and Protection
Maximum: 10 points. This dimension assesses whether the intellectual property that drives your business value has been identified, documented, and formally protected.
All trademarks registered and currentName, logo, and distinctive taglines registered with IP Australia in all relevant classes. Renewals tracked.
IP Asset Register exists and is currentAll IP assets documented in a single register: systems, brand elements, customer data, proprietary methods, content. Updated in last 12 months.
Core operational systems are documentedKey processes written in sufficient detail that a new operator could follow them without asking the founder. Not stored primarily in people's heads.
IP ownership formally assigned to the business entityAll IP created by employees and contractors is assigned to the company via written agreements. No IP held personally by the founder.
Confidentiality protections in placeNDAs, employment IP clauses, and contractor agreements protect commercially sensitive IP from unauthorised use or disclosure.
Dimension 1 score __ /10 — 9–10: IP is a sale asset. 6–8: one or two protection gaps to close. Below 6: IP work is the priority before market.
Dimension 2 — Founder Independence
Maximum: 8 points. This is the dimension that most consistently separates a premium-priced business from an average one. A buyer paying for a business is not paying for the person who built it. They are paying for what continues after that person leaves.
Business operates consistently without founder for 4+ weeksEvidence of operational continuity — actual time away where the business performed to standard without founder daily involvement.
Decision-making authority distributed below founder levelOperations, client service, and financial decisions within defined parameters do not require founder approval to proceed.
Management capability exists below the founderAt least one person can lead operations independently. This capability is documented, tested, and not founder-dependent to sustain.
The founder's role is defined, bounded, and transferableA written description exists of what the founder does and what the business does without them. Transition plan documented.
Dimension 2 score __ /8 — 7–8: buyer confidence is high. 4–6: targeted work required. Below 4: this is the primary valuation drag — address before all others.
Dimension 3 — Revenue Quality and Client Relationships
Maximum: 8 points. Recurring, diversified, and contractually committed revenue is worth more at sale than the same dollar amount of transactional, concentrated, or relationship-dependent revenue.
Client relationships held by the business, not the founderClients have meaningful relationships with team members beyond the owner. Retention does not depend on the founder's personal involvement.
Meaningful recurring or contractually committed revenueA material portion of revenue is under contract, subscription, or recurring arrangement that is likely to survive a change of ownership.
No single client represents more than 20% of revenueRevenue is diversified. Concentration risk is a common valuation discount — a buyer who sees 40% of revenue sitting with one client prices that risk.
Key client contracts are transferable on change of ownershipLegal review has confirmed key agreements do not contain change-of-control clauses that would void them at acquisition.
Dimension 3 score __ /8 — 7–8: revenue quality supports a premium multiple. 4–6: consider building recurring revenue structures before going to market. Below 4: address client concentration and contract portability urgently.
Dimension 4 — Financial Clarity
Maximum: 8 points. Clean, consistent, and independently prepared financials are not just a compliance requirement. They are a trust signal. A buyer who cannot confidently read your financials cannot confidently price your business.
Three years of clean, reconciled financial statementsProfit and loss, balance sheet, and cash flow statements prepared by an independent accountant that reflect true trading performance.
EBITDA calculated, documented, and defensibleEarnings before interest, tax, depreciation, and amortisation calculated consistently. Owner add-backs identified, justified, and disclosed.
Personal expenses normalised and documentedAny personal costs run through the business are identified and added back to present a clean operating profit figure. Documented, not verbal.
Working capital requirements understood and documentedA buyer needs to know what capital is required to operate the business from day one post-acquisition. This has been calculated and can be presented.
Dimension 4 score __ /8 — 7–8: financial readiness is strong. 5–6: tidy the add-back documentation and working capital model. Below 5: engage your accountant before any sale process begins.
Dimension 5 — Legal and Operational Readiness
Maximum: 6 points. Operational and legal surprises in due diligence do not just delay settlement — they give buyers a legitimate basis for price reductions or deal exit.
All licences, permits, and registrations current and transferableEvery regulatory requirement, industry licence, and government registration is up to date and has been confirmed as transferable to a new owner.
Lease and property arrangements have adequate remaining termProperty leases have sufficient term or renewal options to give a buyer confidence in operational continuity post-acquisition.
No undisclosed disputes, warranties, or contingent liabilitiesAll known disputes, warranty claims, and contingent liabilities have been identified, assessed, and either resolved or formally disclosed.
Dimension 5 score __ /6
Your Total Score
| Dimension | Maximum | Your Score | Interpretation |
|---|
| 1 — IP Documentation and Protection | 10 | __ /10 | ____________________ |
| 2 — Founder Independence | 8 | __ /8 | ____________________ |
| 3 — Revenue Quality | 8 | __ /8 | ____________________ |
| 4 — Financial Clarity | 8 | __ /8 | ____________________ |
| 5 — Legal and Operational Readiness | 6 | __ /6 | ____________________ |
| Total | 40 | __ /40 | |
35–40: Premium Ready
Your business is positioned to command a premium multiple. The gap between this score and a 40 is still worth closing — every point is worth money.
26–34: Preparation Required
Targeted 12–18 months of structured work will materially increase your sale price. The THINK IP Exit Ready Program is designed for this position.
16–25: Significant Work Ahead
Do not go to market yet. The discount a buyer will apply at this score level is substantial. Invest in preparation now — it will return many times over.
Below 16: Foundational Work First
The business has real value that is currently invisible to a buyer. Begin with the THINK IP Business Diagnostic to identify the highest-leverage actions.
