Business Valuation Readiness Checklist
Whether you are preparing for a sale, establishing a buy-sell agreement, or initiating estate planning, understanding your company's true value requires meticulous preparation.
Financial Clarity
Ensure your books are clean, normalized, and ready for rigorous buyer or IRS scrutiny.
Identify Intangibles
Properly account for intellectual property, brand value, and recurring revenue streams.
Maximize Multiples
Implement strategic changes to drive up your valuation multiple before going to market.
Why Valuation Readiness Matters
A business valuation is not just a multiple of your net profit. Evaluators, buyers, and the IRS look at the quality of earnings, customer concentration, management depth, and industry trends. If your financials are co-mingled with personal expenses, or if your revenue is tied to a single major client, your valuation will suffer significant discounts.
The Readiness Checklist
Before initiating a formal valuation, we help owners prepare by reviewing:
- Clean Financials: Are your financial statements reviewed or audited by an independent CPA? Have personal expenses (add-backs) been properly documented?
- Customer Concentration: Does any single client account for more than 15-20% of your revenue?
- Management Continuity: Are key employees locked in with non-competes and deferred compensation plans?
- Legal & Compliance: Are all corporate minutes, operating agreements, and IP registrations up to date?
- Recurring Revenue: Can you prove predictable, contracted revenue streams versus one-off project sales?
By addressing these items proactively, you not only increase the ultimate valuation of your business but also drastically reduce the friction during due diligence.