Exit-Readiness Fit Check: How and Why We Use It

Short version: The Exit-Readiness Fit Check is a fast screening step before any sell-side work. It protects confidentiality, prevents guesswork, and ensures the next step is correct: Exit-Readiness Audit, a focused “fix-first” plan, or a different priority entirely.

1) What the Exit-Readiness Fit Check Is (and Is Not)

The Fit Check is a practical gate before any deep work. Its job is to confirm: (1) the goal is truly asset value, (2) the business can execute change, and (3) the evidence exists (or can be produced) to support buyer-grade readiness.

• It is: a structured screening step to choose the correct next move and prevent a mis-scoped engagement.
• It is not: a valuation report, a full diligence project, or “consulting theatre” without proof.
• It respects confidentiality: we ask for the minimum required to see reality, not a data dump.

2) Why We Use a Fit Check Before Any Audit or Advisory

Sell-side work fails for predictable reasons: the wrong owner is involved, the business cannot execute, or the evidence is too weak to survive buyer scrutiny. The Fit Check exists to reduce those risks early.

• Outcome control: if decision rights are unclear, execution slows and value leaks.
• Scope control: the Fit Check prevents you paying for the wrong work (or the right work at the wrong time).
• Proof discipline: readiness is built on verifiable numbers and transferability, not narratives.
• Speed: when the business is ready to implement, a 100-day plan can move the needle quickly.

3) Who It’s For: The “Green Outcome” Profile

The strongest fit is a business where the offer works, but operations and transferability are the constraint. These are the situations where buyer-grade readiness and owner-independence create immediate value.

Typical “Green” signals

• You want a business that can be owned by someone else (transferable, financeable, provable).
• You can make decisions fast (priorities, budgets, accountability).
• You accept that exit readiness is built through evidence quality, operational control, and reduced founder dependency.

4) Who It’s Not For: Common “Red Outcome” Patterns

Sometimes the correct next step is not exit readiness. The Fit Check is designed to detect that early and avoid wasted time.

Common “Red” patterns

• Demand is the bottleneck: inconsistent pipeline, weak offer, fragile distribution, or closing issues.
• No decision authority: the applicant cannot approve priorities, budgets, or organisational change.
• Founder dependency is defended: refusal to delegate, document, and run by metrics (transfer risk stays high).
• Reality cannot be shared: no credible numbers, or unwillingness to provide minimum proof.

5) What We Verify (Proof, Not Opinions)

You do not need perfection. You need access to reality. The Fit Check verifies whether the basic building blocks for buyer-grade readiness exist (or can be produced quickly).

5.1 Financial reality

• Recent P&L (ideally monthly), plus current snapshot if available.
• High-level view of liabilities/commitments (even if rough).
• Top expense categories and what is discretionary vs structural.

5.2 Operational reality

• Who owns what (real org chart / responsibility map).
• How work flows from lead → delivery → cash.
• Where quality breaks, delays occur, and profit leaks.

5.3 Owner dependency reality

• What only the owner can currently do (sales, approvals, delivery, finance, relationships).
• What breaks if the owner disappears for 30 days.
• Whether there is a credible #2 (or path to create one).

5.4 Systems and reporting reality

• Primary systems used (CRM, accounting, delivery, support, operations).
• How reporting is produced and whether numbers are trusted.
• Single points of failure (one person, one laptop, one spreadsheet).

5.5 Risk reality

• Customer concentration and key-person dependence.
• Supplier dependence (if relevant).
• Material disputes, compliance, licensing, or contract risks (if applicable).

6) Fit Outcomes: Green / Amber / Red (and Next Steps)

The Fit Check ends in one of three outcomes. Each outcome has a clear next action.

Green: proceed to Exit-Readiness Audit

• The goal is clearly asset value (exit or owner-independence).
• The business can execute change with clear authority.
• Evidence exists (or can be produced quickly) to build buyer-grade readiness.

Next step: Exit-Readiness Audit (buyer-grade operational due diligence + roadmap).

Amber: proceed, but only after a short fix-first step

• One constraint blocks readiness (often reporting clarity, ownership, or a dependency hotspot).
• You get a small, specific proof plan to remove the blocker.

Next step: implement the proof plan, then re-run the Fit Check outcome quickly.

Red: do not proceed to exit readiness yet

• Demand/offer/distribution is still unstable, or decision authority is missing, or proof is not accessible.
• You get a re-qualification path (what to fix first, and what proof to bring next time).

Next step: follow the re-qualification plan below, then re-apply.

7) How the Fit Check Connects to the Exit-Readiness Audit

Think of the Fit Check as the gate and scope setter. The Audit is the paid, buyer-grade work product.

• Fit Check: confirms the correct next move and the minimum evidence required.
• Exit-Readiness Audit: produces a defendable readiness picture: risk map, transfer plan, owner dependency profile, and a practical roadmap aligned to buyer scrutiny.

8) If You’re Not Ready Yet: Fastest Path to Re-Qualify

If you get an Amber or Red outcome, the goal is to remove the blocker without creating bureaucracy.

• If demand is unstable: strengthen offer and distribution first. Readiness work comes after revenue is reliable.
• If you are not the decision-maker: involve the economic buyer directly. Delegated projects stall.
• If there is no ops owner: appoint one accountable owner (not a committee) with authority and metrics.
• If everything is in your head: document the top 5 repeat processes and remove yourself from one.
• If reporting is not trusted: create a simple, repeatable reporting cadence from source systems.