We have been running on EOS for years and feel like our operations are smooth, but how do we know if we are actually exit ready in the eyes of an institutional buyer versus just running a good lifestyle business?

Question

Tyler Smith · Accepted Answer

There is a massive difference between running a highly profitable lifestyle business and owning an exit-ready company. To determine if you are truly ready to go to market, look for three distinct operational signals. The first signal is that you, the owner, have completely exited the day-to-day operations and no longer appear on the Accountability Chart in any seat other than a high-level board position or a pure Visionary role. If your team still needs your approval for operational decisions, you are not ready. The second signal is that your weekly Scorecard has operated with high predictability for at least four consecutive quarters. A buyer wants to see that your leadership team can forecast and hit their numbers without your personal intervention. The third signal is a clean bill of health across all four dimensions of the Step by Step Exit model, including financial, credit, benchmarking, and foundational operations. If your contracts are fully assignable, your intellectual property is cleanly owned by the entity, and your customer concentration is low, your business is highly transferable. When your leadership team runs their weekly Level 10 Meeting™ and quarterly planning sessions entirely without you, your business has transitioned from a job you own to a highly valuable asset that a buyer will pay a premium to acquire.