An owner reads a bound report at his desk in a plant office.
For Owners · Before You Sell

Exit Readiness Review: understand what a buyer may find before you go to market.

An Exit Readiness Review helps owners understand what a potential buyer may question before going to market. We examine financial records, operating risks and owner dependence within the agreed scope, then identify what to address, document or prepare. Use the findings with your own team or engage LIMESTONE for separately scoped implementation.
Hoosier Supply Co. · Illustrative

The owner’s self-rating, against what the evidence supported.

68 against 45
What he believed, against what the evidence supported
Scored on the same 25-factor rubric both times. The left number is his own free Foundation Check self-rating. The right is ours, where every factor had to cite a document, a number, or something we watched happen. He was rating the part he could see, which is the part that works.
4.0 against 1.8
Leadership bench, the widest gap of the five dimensions
A capable office manager who had never set a price, never negotiated a vendor program and never held a profit-and-loss statement.
30 days
What it took to close the retention gap behind the lowest-rated dimension
Nothing held the two people a buyer would have to keep. No agreement of any kind, no non-solicitation covenant, no retention award. Closed with paperwork in a month; done during diligence, the same paperwork looks like a reaction.
Financial ReadinessScope one

What the business earned, proved to the bank.

From a readiness diagnostic of the numbers to a separately scoped sell-side Quality of Earnings. Led by Ryan Anoskey, CPA.

  • Every add-back against three gates
  • Personal spending stripped out
  • The walk from the filed return, tied
  • Working capital and the peg
Comprehensive keeps all of that and adds
Comprehensive Exit ReadinessScope two

Whether those earnings belong to the business or to you.

The operating and market read: interviews, the calendar, the approval routing, the customers and the market the business sells into. Led by Jared Luegers, CFA.

  • Which seats the earnings run through
  • Whether anyone else can hold them
  • What the customer relationships attach to
  • What a buyer underwrites on day one

Either scope ends in one report, one readout and a prioritized fix list. The free Foundation Check is your own rating; the Review is the evidence.

Both scopes are set in writing before work starts. The financial mechanics live on the Quality of Earnings page and are not repeated here.

The two scopes

A buyer reads the numbers and the operation together, and the Review can do both.

Ryan Anoskey, CPA, leads the financial analysis, informed by more than 100 quality of earnings reviews across his career and a background in financial statement audit. Jared Luegers, CFA, leads the operating assessment, drawing on investment research, acquisitions and operating-company implementation experience. The work examines management, owner dependence and other business risks within the agreed scope, with interviews and additional investigation defined in advance.
A machinist checks a part at the door of a machining center in a precision plant.
The five dimensions

The two dimensions he overrated most are the two he could not see from inside.

Note the last row: deal-ready is the one dimension he underrated.

Dimension He rated Evidenced What the evidence rests on

A. Clean numbersCan a buyer trust the numbers?

4.0

2.4

AmberEarnings quality is strong. The close lands near day 20 with no commentary, and no customer-level or line-level margin exists.

B. Runs without youDoes it run when you are out?

4.0

2.0

RedThe counter and the warehouse run without him for a week. Pricing, purchasing and the top three accounts do not. 61% of scheduled time in customer, pricing or vendor meetings, and 11 of 14 recurring approvals route to him.

C. Leadership benchIs there a team that carries it?

4.0

1.8

Red · the binding constraintNo employment agreements for the two seats a buyer must keep, and no named successor for any seat he holds.

D. Market positionIs the position durable?

3.0

2.2

AmberThe service advantage is real and his own data supports it: a 96.4% fill rate on stock items. Pricing power is defensible on stock and absent on quoted work.

E. Deal-readyReady to transact?

2.0

2.8

Amber · the one he underratedHeld back by an undocumented equity understanding, a related-party lease whose change-of-control terms are untested, and a largest account on no written terms.

Foundation Score

68

45

Out of 100. Evidenced stage: Footing.

Scored 1 to 5 on a 25-factor rubric, five factors per dimension, equal weight. The rated column is the free Foundation Check self-assessment; evidenced is our rating, each factor citing a document, a data point or a direct observation. Source: LIMESTONE analysis. Illustrative; Hoosier Supply Co. is our sample company.

Revenue against gross profit

Illustrative · trailing 12 months

Share of revenueShare of gross profit
Customer AOpen POs, volume pricing
23.4%19.3% of profit
Customer B
12.2%11.4%
Customer C
9.0%9.7%
Customer D
5.8%6.8%
Customer E
4.8%4.5%
Customers F to J
14.1%14.8%
All other accounts202 accounts
30.7%33.3%
The top account
23%of revenue

19% of gross profit. It buys at volume pricing on open purchase orders with nothing to assign at close; the exposure is the relationship.

The top ten
69%of revenue

67% of gross profit. The tail of 202 small accounts carries a third of the profit on under a third of the revenue.

Hoosier Supply Co. is our sample company. Gross profit by account is built in the review from the price file and cost of sales; the business had never produced it. Shares of the trailing twelve months. Shares rounded.

Beyond the five dimensions

Six more tests, each with a document behind it.

  • A cash schedule by customer and by entity
  • Profit by customer, beside revenue by customer
  • Reputation: reviews, complaints and litigation
  • Trade references, called only with your written consent
  • Insurance: three years of premiums and loss runs
  • Every seat you hold, priced at market

Every leader interview also asks whether anyone inside has tried to buy the business.

The default

No contact at all.

The concentration read comes from your contracts, your invoices and your churn history. It needs no phone call, and most reviews never make one.

If you switch it on

01

You pick the accountsUsually the three or four where the answer actually matters.Your call

02

You make the introductionIn your words, on your timing. Nobody is contacted cold and nobody hears it from us first.Your call

03

The same question set every timeWhether they are buying the business or buying you, what switching would cost them, and whether the margin survives a new owner.

04

Themes in the report, names only with consentNo quotation is attributed to a named customer unless that customer agrees to it.Their call

A declined interview is recorded as a limitation and weighed in context.

Your customers

We do not contact your customers unless you ask us to.

The first thing most owners ask is whether this puts their accounts at risk. It does not; the exhibit shows the only way a customer is ever contacted.

Whose yes a sale needs

Asset sale against stock sale

Who has to say yes

Asset sale

Stock sale

Customers with change-of-control or anti-assignment clauses

Consent to assign each contract with the clause.

Consent only where the clause names a change of control.

The landlordThe lease

A new lease, or assignment with consent.

Consent where the lease has a change-of-control clause.

The lender

Payoff at close; liens released.

Payoff or consent; guarantees reassigned.

Licensing bodiesEntity or personal licenses

New licenses, or a qualifier the buyer brings.

Entity licenses stay; a personal one needs a qualifier.

Vendors with dealer or supply agreements

Consent to assign, or a new agreement.

A change-of-control check on each.

Contractors and employees who hold rightsWork they built; covenants they signed

Assignments and covenants re-papered where they do not transfer.

Carry over as written.

The pattern

An asset sale re-papers almost everything; a stock sale carries the contracts and their clauses with it.

Consents a sale of a business this size commonly needs; counsel confirms each for your deal.

Whose yes a sale needs

Deal-ready includes everyone whose consent a sale needs.

The deal-ready dimension maps everyone whose yes a sale needs. The Review lists each consent and what it rests on, so nothing is asked for in the week before closing. Your counsel decides the form of the deal.

The fix list

Each finding gets a call: fix before market, fix after an offer or disclose.

Fix before you go to market

Five · all inside 90 days

  • The office manager and the estimator under agreement30 days
  • The equity understanding and the dealer consent in writing30 to 60 days
  • A named contact on the three owner-held accounts60 to 90 days
  • The price file recalibrated, with a margin floor30 to 60 days
  • Margin by line, a close by day 15, a weekly meeting90 days

Fix after an offer

Four · real work, after an offer

  • Pricing authority into the office manager’s seat9 to 12 months
  • The three largest vendor programs handed over6 to 9 months
  • The four riskiest processes written down6 months
  • Change of control tested on the warehouse lease60 days

Stop fixing it and disclose it

Three · priced into the deal

  • The 23% customer concentrationNot fixable
  • The lost account and the service failure behind itHistoric
  • The on-premise server and the paper ticketsNot worth it

The retention paperwork goes first: every other fix assumes the two people a buyer must keep are still there.

From the sample review’s fix list, which rates every item on its consequence to price and gives the effort and the time to fix it. Illustrative; Hoosier Supply Co. is our sample company.

Runway

Which fixes fit the time you have?

The question an owner actually asks is whether there is still time. Nothing on this list is exotic, and all of it takes longer than an owner expects, which is the argument for starting before you think you need to.

Three years

Everything is still available, including the things only time can prove.

Twelve months

Authority can still move, and proving it takes the whole year.

Three months

Mostly paperwork and pricing. Everything else becomes disclosure.

Timings from the sample review’s fix list, which states an effort and a time to fix for every item. Source: LIMESTONE analysis. Illustrative; Hoosier Supply Co. is our sample company.

After the review

Most owners run the list themselves, and some want it run with them.

The Review ends in a fix list written to be run by the owner. Owners who want it run with them bring in a CFO partner, an operating partner or both, working the same list on two clocks, re-scored each quarter. That is the Exit Readiness Partnership.

See the actual work

You can read a whole review before you hire anyone, including us.

The readout excerpt

Three pages from a full review: the five dimensions, the findings register and the fix list.
Ask for it on the call or email jared@limestonesp.com.

What the excerpt holds

  1. 01

    The five dimensionsEach scored 1 to 5, with the evidence behind the score.

  2. 02

    The findings registerEvery finding sized, sourced and rated for its effect on price.

  3. 03

    The fix listEvery item with its consequence, the effort and the time to fix it.

The full sample report

Ten pages: the executive summary, the five dimensions scored against evidence, the twelve findings with the call on each, the fix list and the readout. Hoosier Supply Co. is our sample company, and every page says so. It records the green findings as carefully as the red.
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We use this to send the report and one follow-up, plus the newsletter only if you tick the box.

Questions We Get

What owners ask before they start.

If yours is not here, the full FAQ has more, or ask it on the call. The Owners & Sellers page lays out where to start by how far out you are.

How far out should I do this?

Three months to four years. Closer than three months and the list is mostly disclosure, because the fixes that matter need time to become true. Further out than four years and the business changes enough that parts of it have to be re-run. Two years out or more, almost everything on the list is still reachable. More than four years out, start with the free Foundation Check or an Exit Readiness Partnership, and run the Review closer to the sale.

What are the scopes, and which one do I need?

Choose Financial Readiness for a narrower financial diagnostic or, where appropriate, a separately scoped sell-side QoE. Choose Comprehensive Exit Readiness to add selected operational and market work to an agreed financial scope. Standalone operating-only investigation can also be quoted.

Do I need a Quality of Earnings first?

No. Financial Readiness can begin with a limited diagnostic and does not automatically include a formal QoE. A Comprehensive Exit Readiness project includes only the specific financial and nonfinancial work agreed in writing. If another firm has already performed suitable work, we can review it as context and scope around it.

Will you talk to my customers?

Only if you ask us to. By default the concentration read uses your contracts, invoices and churn history. If you switch calls on, you pick the accounts and make the introduction, every customer gets the same questions, and names appear only with that customer’s consent.

Will you tell me what the business is worth?

Not in writing, and not as a conclusion of value. We are not appraisers and we do not do valuations. At the readout we will tell you out loud what buyers are underwriting for businesses like yours, and we will say plainly that this is not a valuation.

What if the answer is that I am not ready?

Then you will hear it, with the list of what would have to be true and how long each item takes. An owner who learns that from us has time to act on it. An owner who learns it from a buyer is renegotiating.

Is this the same as the Exit Readiness Partnership?

No. The Exit Readiness Review is a defined assessment with written findings and a readout. An Exit Readiness Partnership is optional continuing work whose level and responsibilities are separately agreed.

What is this not?

An Exit Readiness Review is a readiness assessment. It leaves out a valuation, an audit, a review or attest engagement, a broker’s opinion of price, and the fix itself, and it does not guarantee transaction proceeds. It is a read of what a buyer will find and what to do about it, in time to do it.

get started

Learn what a buyer will find, while you can still change the answer.

Tell us roughly when you want to sell and what the business does. A thirty-minute call with both partners, then one fixed fee in writing, half at signing and half at delivery. We carry a small number of these at a time, and we say at scoping what the calendar holds. If this business does not need the full review, that is what you will hear.

Jared Luegers, CFA · Founder and Managing Partner · jared@limestonesp.com

Ryan Anoskey, CPA · Partner · ryan.anoskey@limestonesp.com