Exit Readiness
Get Your Books Ready Before
Buyers Come Looking
Help a buyer understand your profit, job costs, unpaid invoices and customer mix. Prepare accrual books (recording revenue and costs when earned or incurred), work-in-progress (WIP) schedules and supported earnings adjustments before diligence (the buyer’s verification of your records). EBITDA means earnings before interest, taxes, depreciation and amortization, a profit measure used in valuation. The 5-8x and 7-9x EBITDA spans are independent illustrative negotiation inputs, not a verified current transaction distribution or a reward guaranteed by preparation. A 12-24 month planning window depends on your starting records, transaction scope and buyer timetable.
8
selected transactions
Named deals in the Level contractor M&A tracker, not a census of new PE groups or the whole market
5-8x
EBITDA
Illustrative EBITDA multiple inputs, not a verified current private-company selling-price distribution
12-24
months
Planning preparation window, adjusted to actual books, buyer and transaction needs
“Fictional diligence scenario: the top 5 customers represent 35% of revenue. Review customer contracts, renewal evidence and substitution risk; that ratio alone does not establish a valuation haircut.”
Synthetic diligence examples, not client results
“Fictional diligence scenario: 50 jobs older than 90 days have no invoice. Check completion, contract terms, billing eligibility, retainage and disputes before classifying them as unbilled revenue or an accounting error.”
Synthetic diligence examples, not client results
Due Diligence Checklist
What PE buyers look for
Use these checks to prepare a supported first data room. Here’s what private-equity (PE) buyers may examine in your first data room, the records assembled for their review.
Accrual-basis books for your CPA’s review
Confirm the actual buyer and quality-of-earnings requirements. Three years of accrual statements is a preparation example, not a universal minimum; cash-basis records or personal expenses need a documented adjustment bridge. Level prepares accrual-basis management records and supported adjustment schedules for your CPA’s review. Your CPA decides tax-method changes and performs any formal reviewed or audited financial-statement work required.
Job-level profitability data
PE buyers want to see margin by job type, customer segment, and service line, not just a consolidated P&L. This is your story of where the money comes from.
Clean AR aging
Separate accepted overdue balances, valid retainage and disputed amounts. A balance older than 90 days calls for evidence and a collection owner; it does not establish a dollar-for-dollar valuation haircut.
Revenue mix (recurring vs. project)
Document renewal rates, contracted scope, customer retention and contribution after required service costs. Recurring revenue can support underwriting confidence; it does not guarantee a higher multiple.
Know your customer concentration
The Level contractor dataset (n=959 companies with at least $100K annual revenue) has a 31% median largest-customer share, P25 18.5% and P75 54.6%. A 15% largest-customer share-of-revenue screen is illustrative, not an acceptance rule. Review actual contracts, renewal evidence and the buyer's requirements. You need to know your number, and have a plan if it's high.
WIP schedule accuracy
Unearned revenue (amounts received before they are earned), over-billing (billed ahead of earned revenue) and under-billing (earned revenue exceeding billing) can arise; apply the contract’s progress method before classifying them. Buyers will test your WIP schedule for accuracy. Reconcile project costs, accepted billings and remaining-work estimates before responding to the actual diligence request.
Normalized owner compensation
Separate genuinely personal or nonrecurring expenses from costs a buyer must replace. An add-back is an expense a buyer may agree to exclude from adjusted earnings. Owner salary, truck, phone and insurance are not automatic full add-backs; document a defensible market replacement cost and avoid counting the same adjustment twice.
Trailing 12-month EBITDA trend
Buyers want to see trend, not just a point in time. A trailing 12-month (T12) schedule with month-by-month EBITDA helps a buyer examine the earnings trend.
Our Deliverables
What we deliver
A structured 12-month engagement to organize the records, schedules and explanations buyers need for diligence, distinct from the 12-24 month planning horizon above. Acceptance and valuation depend on the business and transaction.
12-month financial cleanup
We review and clean your QuickBooks, reclassify personal expenses, prepare accrual-basis management records if needed (revenue and costs recorded when earned or incurred, rather than when cash moves), and build a clean 3-year P&L and balance sheet, for your CPA’s review. Tax-method changes and formal reviewed or audited financial statements are decisions and work for your CPA.
Reporting packages buyers want
Job-level profitability summary, service agreement book analysis, customer revenue distribution, and a T12 EBITDA schedule formatted the way PE buyers expect to see it.
EBITDA normalization
We document legitimate nonrecurring and above-market expenses, required replacement costs and their ledger evidence. A 20-40% adjustment is a scenario to investigate, not a measured typical understatement of contractor EBITDA. The buyer’s quality-of-earnings process (verification of how the reported earnings were generated) may accept, modify or reject an adjustment.
Customer concentration analysis
We calculate your top-5 and top-10 customer concentration, flag any single-customer dependencies, and help you develop a mitigation narrative for buyers.
Revenue quality assessment
We break out recurring vs. project revenue, maintenance agreement book value, renewal rates, and service contract profitability, the metrics buyers examine when assessing revenue quality.
The difference between prepared and unprepared
On a hypothetical $3M EBITDA business, choosing 4x and 7x gives a $9 million valuation difference: (7 - 4) x $3M, before debt, fees and tax. The 3-4x, 5-8x and 7-9x ranges elsewhere are independent planning inputs, not matched market cohorts. This is sensitivity arithmetic, not evidence that preparation caused a three-turn premium or that a buyer will offer either price. These are two different hypothetical businesses, not Level client results or a before-and-after comparison; organizing records does not turn 40% customer concentration into 12%.
Hypothetical business A: incomplete records
- Cash-basis books with personal expenses mixed in
- No job-level profitability data
- AR aging full of stale receivables
- Owner compensation not normalized
- Top customer at 40% of revenue, not flagged
- Illustrative valuation input: 3-4x EBITDA, not a predicted result
Hypothetical business B: organized records
- ✓3-year accrual-basis books, ready for diligence and your CPA's review
- ✓Job-level P&L by customer, crew, and service type
- ✓Reconciled receivables aging with collection documentation
- ✓EBITDA normalized with documented add-backs
- ✓Customer concentration at 12%, documented for review
- ✓Illustrative valuation input: 7-9x EBITDA, not a preparation premium or predicted result
Content reviewed . Read the revision history.
Level Market Monitor
See what the biggest contractors in America are worth, and what it means for your exit
Public company financials, M&A deal tracker, and valuation multiples. Updated quarterly.
Want the private-market comparison first? The Trade Economy Index publishes EBITDA multiples for all 13 trades.
Operating review
Questions before trusting a margin report
The margin, cash, and operating questions we check first when reviewing your numbers.
Does the job margin include the labor you actually incurred?
Entered hourly rates and payroll cost can use different periods and burden definitions.
Are supplier returns and later bills in the same job population?
A dashboard can describe costs available today without including every adjustment relevant to the requested cutoff.
Which overhead belongs in the decision?
A direct-cost margin and a fully loaded profitability view answer different management questions.
Simple pricing
Three tiers, one ladder.
$500+/mo
Bookkeeping
The clean data layer: monthly books, reconciliations, and organized financials AI can work with.
$1,500-$5,000/mo
Scale
The full AI operating layer: custom agents, weekly actions, and benchmarks to grow margin per hour.
Custom
Platform / Multi-Office
Multi-branch benchmarking and scorecards for PE-backed and multi-location groups.
Other Trades We Serve
Start your exit preparation
We'll review the supplied records, identify supported diligence questions and show what evidence is needed next.
No commitment. Real numbers, not generic advice.