How dependent is the business on you?
Would customers, decisions, relationships, and operating rhythm survive if you stepped away?
The ERG Standard
How sound is your business?
Enterprise quality is more than profitability.
We look at whether a business creates durable value, withstands disruption, operates independently of any one person, and preserves multiple credible paths forward.
Questions worth answering early
What do you really own?
The Standard is built around questions that matter whether the owner ultimately sells, holds, recapitalizes, transitions the business, or simply wants a better company to own.
How predictable are earnings and cash flow?
Not just whether the business is profitable, but how durable, visible, and defensible those economics really are.
Where is value leaking today?
Pricing, working capital, concentration, complexity, underused assets, or capital deployed where it earns too little.
Where could more value be created?
Through better economics, stronger revenue quality, deeper management, new capabilities, or a more valuable business model.
Which paths are actually open to you?
Sell, hold, recapitalize, transition to family or management, step back, acquire, reorganize, or keep building.
What could this business become over the next 1,000 days?
And which possibilities are credible enough to deserve your time, capital, and attention?
The architecture
From business facts to an enterprise view.
The Standard separates measurement, interpretation, evidence, and prioritization. That keeps the score auditable while leaving room for judgment where judgment actually belongs.
Financial, commercial, management, operating, market, ownership, and transition information.
Weighted measures establish the structural condition of the enterprise.
Value Creation, Resilience, Transferability, and Strategic Options.
Critical and Severe issues stay visible; evidence quality remains separate from business quality.
The system surfaces what deserves attention first and which future paths may be credible.
Six enterprise dimensions
Where the business stands.
No single financial metric can tell you whether a company is sound. ERG evaluates six parts of the enterprise that collectively shape durability, predictability, transferability, and value.
Financial Quality & Cash Economics
Reporting discipline, earnings quality, cash conversion, working capital, capital demands, leverage, obligations, financial flexibility, and the credibility of the numbers.
Revenue Quality
Customer concentration, recurrence, revenue visibility, pricing power, retention, customer durability, pipeline quality, and dependence on individual relationships.
Management Depth
Leadership capability, decision rights, succession depth, incentives, accountability, management cadence, and the extent to which the company can run without the owner.
Operations & Systems
Process maturity, documentation, technology, data, scalability, redundancy, continuity, and exposure to key people, suppliers, facilities, equipment, or systems.
Market Position
Competitive durability, differentiation, customer demand, industry structure, end-market exposure, growth logic, concentration, and strategic relevance.
Ownership & Governance
Entity structure, shareholder rights, stakeholder alignment, succession planning, decision-making, legal and diligence readiness, and transition complexity.
Four interpretive lenses
Six dimensions show where the business stands. Four lenses show what that means.
The dimensions are operating inputs. The lenses are the strategic outputs owners and advisors ultimately care about.
Value Creation
Can the enterprise generate durable cash flow, defend its economics, deploy capital intelligently, and support credible growth?
Resilience
Can the company absorb customer, people, supplier, capital, technology, or market shocks without disproportionate damage?
Transferability
How much of the company's cash flow, knowledge, relationships, authority, and capability survives a change in owner or leader?
Strategic Options
How many credible paths remain open: sell, hold, reorganize, transition to family or management, take on capital, step back, or keep building?
Owner independence
A business can be profitable and still be trapped inside its owner.
Owner dependence is cross-cutting. It can sit in sales relationships, pricing authority, operating knowledge, recruiting, customer trust, approvals, or the informal decisions that keep the company moving. ERG treats owner independence as its own signal because it directly affects continuity, transferability, and the owner's freedom.
RelationshipsAuthorityKnowledgeSalesOperationsDecision-making
The Readiness Index
Strong averages are not enough.
A simple average can allow unrelated strengths to conceal a serious weakness. ERG therefore gives extra weight to the two weakest dimensions before applying explicit risk gates.
Readiness Index75% × Dimension Mean
+ 25% × Weakest-Two Average
+ 25% × Weakest-Two Average
The result is then subject to non-compensatory risk gates. A company cannot score its way around a critical weakness.
Non-compensatory risk
Some weaknesses cannot be averaged away.
Materially unreliable reporting, serious liquidity strain, unclear ownership rights, severe customer concentration, or a company that cannot operate effectively without its owner are not just “low scores.” They can constrain the whole enterprise.
Fundamental constraint
Can cap the readiness stage regardless of the numerical average.
Material structural risk
Remains visible even when stronger areas would otherwise lift the score.
Business quality ≠ evidence quality
Self-reported findings and independently substantiated findings are explicitly distinguished.
The priority engine
The lowest score is not always the first thing to fix.
Priority reflects the size of the gap, strategic impact, remedy runway, transition horizon, and Critical or Severe risk status. Long-lead structural problems rise in priority as the owner's timeline shortens.
Priority considers
GapHow far from strong
ImpactHow much it matters
RunwayHow long it takes
HorizonHow much time remains
RiskCritical / Severe overlay