Everyone Exits Eventually
Score what you can show a buyer today. See your stage, the one proof to work on first, and what moves you forward.
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Sign in to saveA buyer pays for what you can prove, not for what you believe. The Eight Proofs are the eight things every buyer checks. This scorecard asks you to score each one the way a buyer would, so you can see where you stand today and what to work on first.
Each proof has four pieces of evidence. Score each one from 0 to 3 for what you can show today, not what you plan to have. If you are between two scores, pick the lower one. Open "What Proven looks like" on any card to see the standard a buyer would expect.
Each proof's score is its lowest item, not its average. A buyer does not average your strengths and weaknesses; they find the weakest point and price the whole business on it.
Proof 1 of 8
Why a buyer cares
Nothing else can be proven until the numbers can be trusted. A buyer prices only the cash flow their accountant can verify.
The buyer asks: When do you close your books each month?
Closed by the 10th for each of the last 12 months, with the close dates logged.
An outside CPA has reviewed a monthly close and found no material adjustments.
The buyer asks: Do your books tie to your tax return?
A one-page bridge from P&L profit to tax return income for each of the last three years.
The bridge was prepared or reviewed by a CPA with business-sale experience.
The buyer asks: Which expenses are you asking me to add back, and can you document each one?
A written add-back schedule with an invoice or ledger reference behind every line.
The schedule has been through a practice quality of earnings review and held up.
The buyer asks: Are AR, AP, WIP and debt on your balance sheet real?
AR and AP agings, the WIP schedule and the debt schedule tie to the balance sheet every month.
Twelve consecutive months of tied schedules, with no unexplained year-end adjustments.
Proof 2 of 8
Why a buyer cares
Revenue is not value; margin is. If your job-level margin cannot be reproduced from your records, the buyer will re-cut it lower.
The buyer asks: Show me gross margin by job. Do RMS and QuickBooks agree?
Job costs in RMS and QuickBooks are reconciled monthly and the difference is explained.
The difference has stayed inside a tolerance you set for six straight months.
The buyer asks: Where are the costs that never made it into the estimate?
Non-estimated costs are coded to the job that caused them; supplements are tracked to collection.
Ten closed jobs were audited: estimate, actual cost and final margin all tie out.
The buyer asks: When did you know this job was losing margin?
Estimated, forecast and final margin are reviewed weekly on every open job.
You can show jobs where a margin slip was caught mid-job and corrected.
The buyer asks: Is your margin steady, improving or sliding?
Gross margin by line of work (mitigation, reconstruction, contents) for the last 36 months.
The trend is flat or improving and you can explain every large swing.
Proof 3 of 8
Why a buyer cares
A buyer is purchasing the people who do the work. A team that can show its goals and results earns a higher multiple.
The buyer asks: Who decides what when you are not here?
A current Role Map with written decision rights for each leadership role.
Leaders made those decisions without you for a full quarter, and it is documented.
The buyer asks: Show me each leader's goals and whether they hit them.
Every leader has written goals and recorded results for the last four quarters.
Most goals were met, and each miss has a written cause and correction.
The buyer asks: How does the team know each week if it is winning?
A weekly Scorecard with at least 12 weeks of history, and a Weekly Sync held with notes.
A full year of history, and the meeting runs without you in the chair.
The buyer asks: Who is your second in command, and will your key people stay?
A named successor for each key role and a written retention plan.
Key people have signed retention or stay agreements, and your second in command has run the business.
Proof 4 of 8
Why a buyer cares
If the business needs you every day, the buyer is buying a job, and pays accordingly. A month away is the test.
The buyer asks: Is the way you do the work written down?
Each core system from first call to final payment is documented and has a named owner.
A new hire has been trained to standard using the SOPs alone.
The buyer asks: Who else can do each critical step?
A Training Tracker shows at least 80 percent of the team trained on the SOPs for their role.
Two people can perform every critical step; cross-training is proven by coverage during absences.
The buyer asks: What do you personally do that nobody else can?
A list of everything you personally do, each item reassigned to a role with an SOP.
Your hours in daily operations have been under ten a week for a full quarter.
The buyer asks: Take a month off. What happens to revenue and the phones?
One full month away, documented: revenue, margin and customer scores before, during and after. (Two weeks scores as Partly.)
Repeated in a second year, or taken with no contact at all.
Proof 5 of 8
Why a buyer cares
Referral relationships that live with one person leave with that person. A buyer pays for relationships the company holds.
The buyer asks: Who owns your top referral relationships?
Your top 20 referral sources listed, each with a primary and a secondary contact inside the company.
Each source has been served by the secondary contact with no drop in work.
The buyer asks: If I look in your CRM, will I find your relationships there?
All referral contacts and activity are in the CRM, not in personal phones or memory.
CRM data has driven the weekly sales review for at least six months.
The buyer asks: Which programs are you on, and whose name is on them?
Program, carrier and TPA agreements are in the company's name and compliance is current.
Twelve months of program scorecards in good standing.
The buyer asks: If your best estimator left tomorrow, what would leave with them?
Key relationships are shared across roles, and confidentiality and non-solicitation terms are in place where your attorney says they are enforceable.
A key person left or was out for an extended period and the relationships held.
Proof 6 of 8
Why a buyer cares
Licenses, the franchise agreement and the lease are what make the business legally transferable. Gaps here stop a closing.
The buyer asks: Are your IICRC, mold and state contractor credentials current?
A register of every license and certification with holder and expiry date; all current.
A successor qualifier has been identified and holds the credentials.
The buyer asks: Are you in good standing with the franchisor?
Franchise agreement, term and renewal dates are known; all fees and reports are current.
PDRI has confirmed good standing in writing within the last 12 months.
The buyer asks: Can your lease be transferred to a buyer?
The lease has been reviewed for term, assignment and renewal options.
The landlord has confirmed the assignment terms in writing.
The buyer asks: Is there anything in your legal file that will surprise me?
Entity records, ownership, insurance policies, key contracts and vehicle titles are organized; open claims are listed.
A transaction attorney has reviewed the file and the issues found are cleared.
Proof 7 of 8
Why a buyer cares
A buyer is paying for next year's revenue, not last year's. They need to see where it will come from without you.
The buyer asks: Who brings in the work, other than you?
A named person owns BD and reports an activity Scorecard weekly.
New referral sources have been won by the team without your involvement.
The buyer asks: How much of your revenue depends on one source?
Revenue by source for 36 months, and a written plan for any source large enough to hurt the year if lost.
Concentration has been reduced, or the large source is under a written agreement.
The buyer asks: What does a new lead cost you, and how many do you close?
A marketing plan with a budget and results by channel.
Cost per lead and close rate tracked for at least 12 months.
The buyer asks: What will the next 90 days look like?
Pipeline and WIP backlog reported weekly, with a 90-day revenue forecast.
Forecast accuracy is tracked and has stayed inside a range you set.
Proof 8 of 8
Why a buyer cares
Sellers who do not know what they need, or what they will do next, back out late or accept bad terms. Your plan protects the deal and you.
The buyer asks: Do you know what you need from this sale?
A personal financial plan, prepared with a planner, stating the after-tax amount you need.
Updated in the last 12 months and compared with the current value estimate.
The buyer asks: How do you intend to exit, and what is your fallback?
A written Resale Strategy naming your first-choice path and a fallback.
Reviewed with your advisor and, where relevant, discussed with the successor or franchisor.
The buyer asks: Who is advising you, and have they done this before?
A CPA with business-sale experience, a transaction attorney and a financial planner are named and engaged.
Your advisors have met together on your plan at least once.
The buyer asks: What happens to this business if something happens to you?
A signed contingency letter; a buy-sell agreement if there are partners; insurance to fund it.
Your spouse or partner and your second in command have read it and know where it is kept.
Each stage has a gate. These five answers, with your proof scores, decide which stage you are in.
Plan gate
Value gap written down?
Until you know the gap between what the business is worth and the number you need, you cannot tell how much work the exit will take.
Plan gate
Contingency letter signed?
If something happened to you tomorrow, a signed letter tells your family and team what to do, so the value is not lost while they work it out.
Prepare gate
Twelve weeks of Scorecard history?
Twelve weeks of weekly numbers show a buyer that the business runs on a rhythm, not on your memory.
Pinnacle gate
Month away completed and documented?
A month away, written up, is the strongest evidence that the business does not depend on you.
Pinnacle gate
Value estimate less than 12 months old?
Value moves with your results and the market. An estimate more than a year old can mislead every decision built on it.