Version 1.0 · Locked 2026-04-29
Vursu Score — Methodology
A 0–10 score that estimates how sale-ready a privately-held business is, based on five required answers (and three optional bonus answers). Designed as a free, self-serve top-of-funnel for owners contemplating an exit. The score is paired with a cohort comparison, the two weakest drivers, and a documented improvement path.
What this is — and isn't
What it is
A directional readiness indicator built from self-reported categorical answers, grounded in publicly available M&A transaction data. It tells you how likely your business is to clear due diligence cleanly and command a strong multiple.
What it is not
- Not a business valuation — real valuations require audited financials and an advisor.
- Not a substitute for due diligence — buyers will go far deeper.
- Not a buy-vs-don't-buy signal — it's a readiness signal.
The questions
Core — 5 required (weighted into headline score)
- Annual revenue — under $500K / $500K–$1M / $1M–$2M / $2M–$5M / $5M–$25M / $25M+. Bands match IBBA Market Pulse quarterly survey segments so cohort comparison maps to a published industry cohort.
- Years in business — under 5 / 5–10 / 10–20 / 20+. The “infant business discount” buyers apply runs through year 5.
- Owner hours per week — under 20 / 20–40 / 40–60 / 60+. 40h is canonical full-time; 60h signals over-dependence/burnout.
- Top customer % of revenue — under 10% / 10–25% / 25–50% / 50%+. Aligned with Value Builder's “Switzerland Structure” concentration thresholds.
- Recurring revenue % — under 25% / 25–50% / 50–75% / 75%+. Aligned with Value Builder's “Hierarchy of Recurring Revenue” transferable-revenue tiers.
Bonus — 3 optional (Operational Readiness envelope)
- Documented processes — nothing written / a few documented / comprehensive / actively used by team.
- Knowledge transfer risk — most lives in your head / about half / some / very little.
- AI / tooling adoption — not at all / individuals ad hoc / shared workflows / integrated into core processes.
Sub-score maps
Each answer maps to a 0–10 sub-score. Higher revenue, longer tenure, more recurring revenue, and better documentation → higher score. Owner hours and customer concentration are inverted (more = lower score).
| Driver | Answer → Sub-score |
|---|---|
| Revenue | under-500k → 2 · 500k-1m → 4 · 1m-2m → 5 · 2m-5m → 7 · 5m-25m → 8 · 25m+ → 10 |
| Years in business | under-5 → 3 · 5-10 → 6 · 10-20 → 8 · 20+ → 10 |
| Owner hours (inverted) | under-20 → 10 · 20-40 → 7 · 40-60 → 4 · 60+ → 2 |
| Top customer % (inverted) | under-10% → 10 · 10-25% → 8 · 25-50% → 5 · 50%+ → 2 |
| Recurring revenue % | under-25% → 2 · 25-50% → 5 · 50-75% → 8 · 75%+ → 10 |
| Doc state | nothing → 2 · some → 5 · comprehensive → 8 · actively-used → 10 |
| Knowledge risk (inverted) | most → 2 · half → 5 · some → 7 · very-little → 10 |
| AI adoption | not-at-all → 2 · individual → 5 · shared → 7 · integrated → 10 |
Weights
Core weights sum to 0.85, leaving a 0.15 envelope for the bonus. When the bonus is skipped, the core weights re-normalize to 1.0 (multiply each by 1/0.85) so a lead who skips bonus questions isn't penalized.
| Group | Driver | Weight |
|---|---|---|
| Financial signal (0.40) | Revenue | 0.25 |
| Recurring revenue | 0.15 | |
| Owner dependence (0.20) | Owner hours | 0.20 |
| Customer concentration (0.15) | Top customer % | 0.15 |
| Tenure (0.10) | Years in business | 0.10 |
| Operational Readiness bonus (0.15) | Documentation | 0.05 |
| Knowledge transfer risk | 0.05 | |
| AI adoption | 0.05 |
Financial signal (40%) — Revenue scale and recurring-revenue mix are the two strongest predictors of multiple in published M&A data. IBBA Market Pulse and BizBuySell both segment primarily by deal size; recurring revenue maps to Value Builder's “Hierarchy of Recurring Revenue” where transferable revenue commands a higher multiple.
Owner dependence (20%) — Single biggest multiple lever per Value Builder's “Hub & Spoke” framework. Buyers heavily discount businesses that can't run without the owner.
Customer concentration (15%) — Value Builder's “Switzerland Structure”; 50%+ concentration is a single-point-of-failure flag that materially compresses the multiple.
Tenure (10%) — Lowest weight because it's largely fixed. Buyers discount under-5 but tenure beyond 10–15 years stops moving the multiple much.
Operational Readiness bonus (15%) — Captures the documentation, knowledge transfer, and tooling axis that Vursu directly addresses. Held as a bonus envelope so the headline score stays grounded in financial fundamentals; the bonus surfaces the Vursu-specific gap.
Final score formula
weighted_sum = Σ(sub_score × weight)
if bonus skipped: weighted_sum = weighted_sum / 0.85
score = round(weighted_sum, 1) → 0.0–10.0
Bands
| Band | Score | Headline framing |
|---|---|---|
| High | ≥ 8.0 | Sale-ready. Maximize the exit. |
| Mid | 5.0 – 7.9 | Solid foundation. Close the multiple-suppressing gaps. |
| Low | < 5.0 | Significant gaps. Most fixable in 12–18 months. |
Worked example — JR911
Answer set (Trey, 2026-04-29): $750K revenue · 25 years · 40 owner hrs/wk · 10% top customer · 55% recurring revenue · no bonus answers.
| Driver | Sub | Weight | Contribution |
|---|---|---|---|
| Revenue | 4 | 0.25 | 1.00 |
| Recurring revenue | 8 | 0.15 | 1.20 |
| Owner hours | 4 | 0.20 | 0.80 |
| Top customer | 8 | 0.15 | 1.20 |
| Years in business | 10 | 0.10 | 1.00 |
| Core subtotal | 5.20 | ||
| Re-normalized (÷ 0.85) | 6.118… | ||
| Final score (rounded) | 6.1 · mid | ||
This is the correctness gate in lib/vursu-score/scoring.test.ts — any change to weights or sub-score maps that moves JR911 off 6.1 fails the test.
Cohort comparison
Results show: “Compared to businesses in the $500K–$1M cohort, your score is 6.1 vs a typical 5.4.” The “typical” number is a calibrated estimate, not a measured average. Estimates are anchored to Value Builder System's published global average of 59/100 (≈ 5.9/10) across ~30k–55k assessed businesses, then adjusted directionally by band.
| Revenue band | Cohort avg | Public anchors |
|---|---|---|
| under-$500K | 4.6 | BizBuySell Q4 2025, IBBA <$500K segment |
| $500K–$1M | 5.4 | BizBuySell Q4 2025, IBBA $500K–$1M segment |
| $1M–$2M | 5.7 | IBBA Q3 2025 ($1M–$2M, +0.3 multiple-pt QoQ) |
| $2M–$5M | 6.1 | IBBA Q3 2025 ($2M–$5M, +0.1 QoQ) |
| $5M–$25M | 6.6 | IBBA Q4 2024 (6.0x EBITDA, $5M–$50M band) |
| $25M+ | 7.2 | IBBA $5M–$50M (no $25M+ split publicly available) |
Calibration plan for v1.x: Once vursu_score_submissions has ≥ 100 rows per band, cohort averages will be recomputed from internal data and cohort_source updated accordingly. Cohort recalibration alone does not trigger a version bump.
Version policy
VURSU_SCORE_VERSION is stamped onto every persisted row. Historical rows are never re-scored under a new version.
Bump the version when:
- Sub-score maps change
- Weight allocations change
- Band thresholds (high/mid/low cutoffs) change
- The set of questions changes
Do not bump for:
- Cohort average recalibration
- Copy changes (headlines, suggestions, email body)
- UI changes
- New cohort_source citations
Sources
| Source | What we use |
|---|---|
| IBBA Market Pulse Q4 2025 | Revenue band cohort definitions; multiple movements |
| IBBA Market Pulse Q3 2025 | $1M–$2M and $2M–$5M QoQ multiple deltas |
| IBBA Market Pulse Q4 2024 | 6.0x EBITDA anchor for $5M–$50M |
| BizBuySell Insight Report Q4 2025 | $375K Main Street median sale, 2.7x SDE, 149-day DOM |
| Value Builder System (Warrillow / Built to Sell) | 59/100 global avg; Switzerland Structure; Hierarchy of Recurring Revenue; Hub & Spoke; +71% multiple premium for 80+ scores |
| Exit Planning Institute, State of Owner Readiness | Owner-dependence and documentation stats defending the weight allocation |
| Exit Oasis — listing-to-sale conversion | ~20% Main Street, ~30% LMM conversion estimates |
Honest data gaps
- Per-band SDE multiples for sub-$1M cohorts are gated behind IBBA's full report; only headline numbers are public.
- BizBuySell does not publicly segment by our exact revenue bands; its data maps cleanly only to under-$500K and $500K–$1M.
- No public source splits at the $25M+ boundary; IBBA's top band is $5M–$50M. The $25M+ cohort estimate is the least defensible of the six.