What have you done lately to prepare your business for sale?

One of the biggest reasons business owners leave large sums of money on the table when they sell (or are unable to sell) is lack of preparation.

You prepared to start your business.  You went through the required licensing processes, obtained a CPA, and began selling a product or service.  You prepared your business for growth each year and you prepared your business for downturns when needed.

Selling your business requires preparation as well.  Documents such as your tax returns and income statements for the previous 5 years are needed.  Contracts such as lease agreements, agreements with suppliers, employees, and customers will need to be presented to the potential buyer(s).  Insurance policies will also need to be presented.

A business valuation revealing the market price for your business will help you understand the starting point for negotiations.

The sales memorandum will clearly identify reasons someone should buy your business.

Your replacement will need to be identified in most cases.  You may be asked to stay on board for a period of 6 months to a year in order to help transition the new owner(s) but in the event the owners are "absentee owners", someone will need to be trained in order to run the operation as you have done over the years.

A list of potential buyers will need to be created in order to ensure the successful sale of your business.  One potential buyer is not enough.  As a matter of fact, when there is only one potential buyer, a number of issues arise.  Typically the buyer is in control of the negotiations.  The buyer can use tactics like dragging out the process in order to beat you down on price.  The buyer can threaten to back out in order to get his terms or his price.  It is ideal to have at least 5 potential buyers who will compete against each other, rather than you, for the purchase of your business.

Consider what you would need to review if you were buying a business and have those items in place at the very least.  To sell for maximum profit, you will want to create a plan much like the business plan you created when starting your business.  Your plan, otherwise known as an exit strategy, will keep you on track through each step of the selling process.