What makes my business worth buying?

The Short Answer

A sellable business has three things a buyer looks for: predictable revenue that doesn't depend on one person, documented systems the team can run, and a growth trajectory that continues after the sale. Most founder-dependent businesses fail on all three.

The Valuation Gap

A founder-dependent business typically sells at 2 to 3x annual earnings, if it sells at all. Many buyers walk away entirely because the risk is too high: if the founder leaves, the revenue follows. A business with documented systems, a trained team, and predictable revenue sells at 4 to 7x annual earnings. For a $2M business, that's the difference between selling for $400K to $600K versus selling for $800K to $1.4M. Same revenue. Different multiple. The gap is the operating system.

The Five Buyer Criteria

1. Revenue predictability. Can the buyer project next year's revenue based on current data? Recurring revenue, long-term contracts, and a healthy pipeline score high. Revenue that depends on the founder closing every deal scores low.

2. Founder dependency. What happens when the founder steps out? If sales slow, delivery slips, and the team waits for direction, the business is worth less. Buyers discount founder-dependent businesses because they're buying a liability, not an asset.

3. Documented systems. Are the key processes written down, tested, and running? SOPs for sales, onboarding, and delivery mean the business can be transferred. Processes that live in the founder's head can't.

4. Team capability. Can the team operate independently? Do they know their roles, own their numbers, and make decisions without the founder's approval? A capable team increases the multiple.

5. Growth trajectory. Is the business growing, flat, or declining? Buyers pay premiums for businesses on an upward curve because they're buying future revenue, not just current revenue.

The Founder Dependency Test

Score yourself 1 to 5 on each question. Can the business generate leads without your personal network? Can someone else close a deal? Can onboarding happen without you? Can the team resolve client issues without escalation? Can the weekly scorecard be reviewed without you leading the meeting?

Maximum score: 25. Most service businesses doing $250K to $5M score between 8 and 15. That's normal, and it's fixable within 90 days.

The 90-Day Path

Month 1: Document and delegate the three most founder-dependent processes. Write SOPs. Install the weekly scorecard and Monday standup. Month 2: Refine the first handed-off process. Hand off the second. The scorecard shows trends the team acts on without your interpretation. Month 3: Run a full revenue engine diagnostic. Score all nine engines. The lowest scores become the next 90 days of priorities.

Even If You Never Plan to Sell

Exit readiness isn't just about selling. A business with systems gives you optionality. Scale it, sell it, step back, or simply stop working 60-hour weeks. The operating system makes all three possible. Building a business that runs without you is the same playbook whether you're planning to sell in two years or stay for twenty.

Where to Start

The Growth Navigator Pro tier ($747/mo) includes exit readiness scoring as part of the Revenue Engine Diagnostic. The Rocket Fuel Sprint ($15,000) builds the complete operating system in 60 days. This guide covers the full framework. Start with the free tier for a diagnosis, or talk to David about Exit Velocity.