M&A Professionals has developed a tool called the “Business Marketability Index™” (see below) that business owners can use to determine how well their business is positioned for sale. The Index is subjective and includes areas important to potential buyers.

(1) Category Explanation: See below for an explanation of each category.

(1) Score: Rate each category according to the following:
N/A = Not Applicable to your business
1 = Poor
2 = Fair
3 = Average
4 = Good
5 = Excellent

(2) BMI: To determine your Business Marketability Index, add all scores and divide by 16 if there are areas that are non-applicable mark "N/A" and divide by the sum of 16 minus the number of "N/A's".

M&A PROFESSIONALS, INC. © 2001

BMI™ Category Explanation

1. Ease to Operate and Manage. How easy or difficult is your business to operate and manage compared to other businesses and industries? Low-tech is generally easier than high-tech, smaller businesses with fewer support staff may be more difficult than a larger business with good support staff, consider how well your business operates in your absence. (The easier your business is to manage, the higher the score.)
   
2. Demand for Specific Industry. How active is your industry in relation to acquisitions, mergers and consolidations? (The more activity, the higher the score.)
   
3. Market and Industry Trends. Are you in a strong and growing market? What are the overall growth trends within your industry? (The better the growth opportunities for your business and industry, the higher the score.)
   
4. Potential for Growth. How well positioned are you to take advantage of growth opportunities? Are growth opportunities significant? (Do you have the people, capital, facilities and equipment? The better your overall position, the higher the score.)
   
5. Historic Financial Performance. Has your business been growing? How does your past growth compare to others in the same industry? Have you been retaining profits in the business? (The better your historic performance, the higher the score.)
   
6. Current Financial Performance. Are revenues up with good profitability? How does your business compare with your industry as a whole and with the economy in general? (If poorer than average in industry and economy, the lower the score. If better than average in industry and economy, the higher the score.)
7. Forecasted Financial Performance. How does your forecasted growth in revenues and profit compare with your industry as a whole and with the economy in general? (If poorer than average in industry and economy, the lower the score. If better than average in industry and economy, the higher the score.)
   
8. Financial Statements. Do you have monthly statements? Are statements prepared internally? Are they compiled, reviewed, or audited by a CPA? (Monthly statements and a reviewed year-end statement rate a score of 3.)
   
9. Orderly Books, Records and Data. Is your corporate record book complete and up to date? How well are all aspects of your business documented? Do you have good internal systems and controls? (Poor books, records and systems score a 1, while excellent books, records and systems score a 5.)
   
10. Condition and Appearance of Facilities. Rate the overall condition, appearance and efficiencies for purpose. (The better the condition, appearance and functionality, the higher the score.)
    
11. Age/Condition of Machinery & Equipment. How does your machinery and equipment compare to the latest and best available? (The better the condition, the newer the equipment and the later the technology, the higher the score.)
    
12. Capital Requirements. Do you require substantial additional capital to meet growth opportunities? (The greater you capital requirements, the lower the score.)
    
13. Products and Services. Are your products proprietary? Do your products or services serve a niche market? (The better your protection, the higher the score.)
    
14. Labor, Legal & Environmental Issues. Is there a pending labor dispute? Are you unable to attract and retain good shop employees? Are there known or pending legal or environmental issues? (If none of these apply, you score a 5; if any apply you could score a 1.)
    
15. Quality of management personnel. Does management have the necessary background, education, experience and training to operate effectively? Do management personnel have the necessary professional certifications? (The better the quality of management, the higher the score.)
    
16. Quality of labor personnel. How do your shop employees compare with employees of other like type companies? (Capable employees, good longevity and high morale rate a higher score.)

As this index is a subjective assesment of your business, please rate your business honestly.