Most business owners think about selling when they're ready to exit. By then, it's often too late to fix the things that actually matter to buyers.

Here's the uncomfortable truth: recent analysis of 840 UK mid-market companies found that only 19% were genuinely ready for a transaction. The rest? Not even close.

The Problem With "Good Fit"

Most deal sourcing focuses on fit. Does the company match your sector? Is the size right? Does it tick the boxes on paper?

But fit doesn't predict engagement. And engagement is what actually matters.

Companies that score high on transaction readiness convert to real conversations at 3-4x the rate of traditional outreach. Not because they're better businesses. Because they're actually ready to have the conversation.

What "Ready" Actually Means

Transaction readiness isn't about wanting to sell. It's about having the right conditions in place. Think of it as four pillars:

Exit Signals (40% of your score)

This is the big one. Are the key people actually ready to exit?

Directors over 65 with 15+ years in their role? That's a signal. PE ownership with a defined timeline? Signal. Recent changes in leadership or shareholders? Signal.

A 45-year-old founder with a succession plan and a growing business? Probably not ready, no matter how good the fit looks.

Financial Signals (25% of your score)

The numbers need to work. Revenue over £5m. Strong balance sheet. Manageable or zero debt. Margins above 10%. Clean compliance.

This isn't about being perfect. It's about being financeable and de-risked enough that a deal can actually close.

Market Signals (20% of your score)

Does the business have strategic value beyond its financials?

Active M&A in the sector. Premium multiples. IP or patents. Government contracts. Strong brand. Good digital presence.

These are the things that help buyers justify paying up.

Execution Signals (15% of your score)

Can you actually get a deal done?

Simple ownership structure. Accessible contacts. Responsive to inquiries. No advisor working the deal already.

Sounds basic, but you'd be surprised how many deals stall on this stuff.

What The Scores Mean

The methodology scores companies 0-100 using Bayesian statistics. Not all signals carry equal weight. High-impact signals (like founder age plus no succession plan) can override weaker negatives.

Here's how to read your score:

80-100: Hot target. Multiple strong signals. High probability of engagement.

70-79: Strong target. Several positive indicators. Worth focused outreach.

50-69: Moderate. Some signals are present, but gaps exist. Selective approach.

35-49: Weak. Limited indicators. Low priority.

0-34: Not ready. Don't waste your time.

Why This Matters

Data from 340 UK deals in 2024 tells the story:

Brokered auctions:

• 4.2 competing bidders on average

• 23% premium to initial expectations

• 6.1 months to close

Proprietary deals (found before market):

• 1.3 competing bidders

• 8% discount to comparable auctions

• 3.4 months to close

The best deals never hit the market. But finding them means knowing who's ready now, not just who fits your thesis.

What To Do With Your Score

Low score? Don't panic. It's a roadmap.

Weak exit signals mean you need stakeholder alignment before anything else. Poor financial signals mean focus on profitability and balance sheet before approaching buyers. Do market signals need work? Invest in brand, IP, or digital presence. Execution issues? Clean up ownership structure and improve responsiveness.

High score? You're in the minority. Time to think strategically about when and how you want to engage with potential buyers.

The Bottom Line

Transaction readiness isn't about being perfect. It's about having the right conditions aligned at the right time.

Most origination teams spend 70% of their time on targets that won't engage. The score helps you focus on the 19% that will.

Whether you're a business owner planning an exit or an investor sourcing deals, five minutes spent understanding readiness will save you months of wasted effort.

Because in M&A, the best fit in the world doesn't matter if they're not ready to pick up the phone.

Ready to see where you stand? The five-minute assessment reveals your score across all four dimensions of transaction readiness.