1. Get a business valuation. One of the first things you should do is obtain a realistic idea of what your business is worth from an objective outside source. A professional valuation provides you with a basis for gauging buyer offers.
2. Get your books in order. Buyers evaluating your business generally require three years of financial information. The more formal your statements (accountant reviewed or prepared versus internally generated), the better the impression you'll make.
3. Understand the true profitability of your business. Most privately held businesses claim a variety of non-operational expenses. Make sure you have supporting documentation for these expenses. In addition there may be infrequent expenses that you'v incurred during the past three years that should be excluded from a buyer's analysis of recurring cash flow.
4. Consult your financial advisor. It is wise to speak with your tax advisor for help planning your financial future. Understating your personal and corporate tax situation may also help you recognize your options with regard to deal structure.
5. Make a good first impression. Will a buyer visiting your shop for the first time see order or chaos? Buyers look for companies that show well, as an orderly shop is often indicative of an orderly management team and overall operations.
6. Organize your legal paperwork. Review your incorporation papers, permits, licensing agreements, leases, customer contracts, and vendor agreements to make sure they are current and in order.
7. Consider management succession. If you're absolutely vital to your business, who will a buyer turn to for help running the business after you leave? You should have a succession plan in place before going to market.
8. Know your reasons for selling. Buyers are always curios as to why a seller wants to exit the business. Be prepared to articulate your reasons.
9. Get your advisory team in place. Start interviewing attorneys and accountants that are proficient in mergers and acquisitions. Strongly consider hiring an industry specific intermediary to represent you and help you through the selling process.
10. Keep your eye on the ball. Don't let your business performance decline because you're too focused on the sale. This will only give buyers additional negotiating power and lower their potential offers.