
How the Score Works
The Revenue Readiness Score is a weighted index of five pillars. Buyers check these five areas to determine if a business can survive a transition. If it can, they pay a premium. If it cannot, they apply the owner discount.
The Five Pillars
Owner Dependence
25% WeightBuyers look at who sources the deals and who owns the relationships. If the owner is the primary rainmaker, the buyer assumes revenue leaves when the owner retires. A high score requires documented processes and a sales team that functions independently.
Pipeline Predictability
20% WeightBuyers hate surprises. They want to see a pipeline that covers future targets by a healthy multiple. A business with handshake deals and a gut-feel forecast receives a lower multiple than one with a tracked, staged pipeline.
Customer Concentration
20% WeightIf 40% of revenue comes from two general contractors, the buyer inherits massive risk. A single lost relationship could cripple the company. A high score demands a diversified customer base where no single account poses an existential threat.
Revenue Quality
20% WeightBuyers pay more for revenue they do not have to hunt for. Maintenance contracts, recurring service agreements, and strong repeat business from inbound channels score higher than constantly bidding new construction projects.
Marketing System Maturity
15% WeightA documented lead generation engine proves the company can grow without heroic effort. Buyers check for active nurture sequences, review generation systems, and diverse lead sources that do not rely on word of mouth alone.
Score to Multiple Translation
The composite score places the business into a multiple band. These bands reflect actual market data for trade contractors doing $5M to $50M in revenue.