Rate each statement
Choose 0 for not in place, 1 for partly in place, or 2 for documented and in regular use. Every item has equal weight.
The percentage summarizes your checklist responses, with each response weighted equally. It tracks checklist completion and has not been validated as a prediction of transaction readiness.
Talk through your preparation
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What the bands mean
0 to 39: use the result to identify basic information and leadership topics to organize.
40 to 69: review areas marked partly in place and decide which deserve attention first.
70 to 100: use the score as a discussion outline and check whether records reflect current practice.
These bands are planning assumptions. Use them to organize preparation topics and track checklist progress. The cutoffs have not been validated as measures of readiness.
These bands are a self-check framework, not a buyer standard, appraisal, diligence result, or recommendation.
Separate the handover conversation from the funding conversation. A firm president and CEO emphasized leaders' emotional readiness and successors' preparation for an ownership investment. Another firm president and CEO connected transition feasibility with capitalization and income flow. Consider whether you are prepared to hand over control. Ask potential successors what investment commitment they understand and are prepared to explore. Discuss funding questions with a qualified transaction CPA and attorney.
Disclaimer
General education only, not engineering, legal, tax, or investment advice. Licensed PE judgment and local codes govern engineering work. The score is based only on your selections and is not an independent assessment. Consult qualified advisers about a transaction.
Example scenario
A hypothetical civil engineering firm owner answers “partly in place” to all 15 exit readiness statements, covering financial records, clients, backlog, project results, leadership, ownership records, and personal goals. The self-check reports a score of 50 and the band “Strengthen selected areas.” Those selections are hypothetical, not a buyer standard or a prediction of sale readiness. The result gives the owner a way to organize preparation work and decide which topics need attention before pursuing a transaction. The owner should review each answer with the people responsible for that area, identify what “partly in place” means in practice, and choose the records or responsibilities to clarify first. A score cannot replace diligence or certify readiness, so the next step is to validate the underlying documents and discuss legal, tax, and transaction questions with qualified advisers.
Contract obligations matter as much as document access. A former principal in charge warned that purchase-order terms can create obligations with professional liability coverage implications. Counsel and the firm's insurance broker can review those terms before the firm accepts them.
Test what delegation means in practice. An industry advisory founder argued for distributing client relationships and decision authority before an ownership transition. A firm president and CEO emphasized clear outcomes and two-way discussion when handing over work. Can the responsible manager describe a delegated decision and the expected result? Who maintains the client relationship, and what responsibility does each person hold? Who could make that decision if the owner were unavailable?
Give the financial answers some working detail. An industry advisory founder identified aging receivables, scope giveaways, weak utilization, and poor backlog monitoring as concerns for firm value. A CPA and business-operations adviser recommended comparing physical project completion with billing and incurred cost. Ask your CPA or financial manager: what does receivable aging show? On a project under review, how do completion, billing, and cost compare? Which scope changes were performed without an agreed fee? Discuss the records behind each answer.
Sources and further reading
- RSH, A Practice Guide to M&A for AEC Firm Owners
- Auxo Capital Advisors, AEC Due Diligence Checklist (sell-side readiness)
- Align people and money for a successful AEC ownership transition (2025)
- Conference call: Sepideh Saidi (2018)
- Conference call: Don Benvie (2018)
- What kills AEC firm value before transition (2026)
- Top Financial Management Mistakes of Small Architecture Firms (2015)
- The Benefits of Professional Development for Civil Engineering Firms: Ep 225 (2022)
- 10 Tips Every Civil Engineer should Know about Managing Engineering and Architectural Design Services Contracts: Ep 040 (2016)
- Growing Your Civil Engineering Firm: Being Proactive, Not Reactive: Ep 178 (2021)
Method, inputs and limits
Purpose
A self-check to organize owner preparation topics, not to certify readiness or predict a sale.
Inputs and defaults
15 statements covering financials, revenue, clients, backlog, project results, client coverage, delivery roles, leadership, successors, retention, ownership records, registrations, insurance records, contracts, and owner goals. Each answer is 0 (not in place), 1 (partly in place), or 2 (in place). All items required; no preselected response.
Formula
Score = round(sum of 15 responses ÷ 30 × 100). Bands: 0 to 39, Organize fundamentals; 40 to 69, Strengthen selected areas; 70 to 100, Review and validate preparation.
Outputs
Score from 0 to 100 and banded guidance.
For the retention discussion, ask who owns employee development. A firm president recommended assigning explicit responsibility for people and culture, recording employees' development goals, and following up through quarterly conversations. The person responsible should be able to say where those goals are recorded. When did staff discuss progress and the support they need? Use those questions to explain what your retention answer means in practice.
Checked cases
- Fifteen zero answers: 0, Organize fundamentals.
- Fifteen one answers: 50, Strengthen selected areas.
- Fifteen two answers: 100, Review and validate preparation.
Disclaimer
Self-check only, based on user selections. Not a buyer standard, appraisal, diligence result, or recommendation. General education only, not engineering, legal, tax, or investment advice. Licensed PE judgment and local codes govern engineering work.
