The M&A Readiness Scorecard: 12 Questions Every Owner Must Answer Before Going to Market

Most business owners believe they’ll be ready to sell when the time is right. But readiness isn’t a decision—it’s a condition. Deals don’t collapse because the business lacks value; they collapse because the value isn’t positioned, documented, or defensible.

At Seaside Business Advisors, we prepare companies to be pursued—not just listed. This scorecard outlines the 12 critical questions every owner must answer before engaging buyers. Anything less is a gamble.

Buyers don’t make offers based on clean books—they make offers based on clarity. Monthly reporting, accrual accounting, margin visibility, customer-level revenue data. If it’s not there, the deal won’t hold.

One-time expenses, owner comp, discretionary spending, related-party transactions—if these aren’t isolated and recast properly, buyers won’t believe your numbers. Valuation depends on adjusted EBITDA, not tax filings.

If one customer accounts for more than 20–30% of revenue, the risk must be explained, mitigated, or offset elsewhere. Strategic buyers can work with concentration. Financial buyers often won’t.

Owner dependency is the fastest way to reduce enterprise value. If you’re the only one with key knowledge, vendor relationships, or sales ability, your business isn’t a business—it’s a job with overhead.

A buyer can’t scale what they can’t see. SOPs, workflows, org charts, and documented systems reduce transition risk and increase valuation multiples—especially in service and operationally complex industries.

Revenue trends without a strategy aren’t impressive—they’re risky. Buyers want to know what levers exist, what’s replicable, and how the business can grow under new ownership. Intuition isn’t a growth plan.

Retention issues, leadership gaps, and compensation structures all surface during diligence. High-performing, loyal teams make integration easier. Turnover creates drag.

Outdated software, manual processes, or homegrown tech debt slow post-close transitions. Buyers don’t want to rebuild infrastructure—they want to expand it. Clean systems create velocity.

Margins tell the story of pricing power, cost control, and operational discipline. If your margins are inconsistent or unexplained, expect heavy scrutiny—and discounting.

Most owners operate with no real sense of market value. A formal valuation doesn’t just clarify price—it uncovers weaknesses, surfaces risks, and informs how to position for strategic buyers.

Pending litigation, unclear ownership, outdated agreements, tax exposure—these aren’t footnotes. They’re deal-breakers. Cleaning these up before diligence protects your timeline and leverage.

Do you want price, peace of mind, legacy, speed, or all of the above? Sellers who know what matters most to them—before they go to market—negotiate from strength.

• 10–12 Yes: You’re structurally ready.
   
• 7–9 Yes: You’re close, but exposed.
   
• Below 7: Don’t go to market yet.
   

No buyer expects perfection. But serious buyers expect readiness—and they pay a premium for it. Going to market without preparation isn’t just risky. It’s expensive.

At Seaside, we help owners answer these questions with precision, not guesswork—and position their companies for exits that don’t just happen, but perform.

Want to benchmark your readiness against real buyer expectations?

Contact Seaside Business Advisors