What are the best things an owner can do to prepare for a sale?
At a practical level, you should have all of your housekeeping in order. All of your financial statements and record keeping should be up-to-date, accurate and available at a moment’s notice. Insurance policies and other types of documentation about your business should be on hand and ready to present to a buyer. All of the procedures and systems at your company should be documented, as well. In short, you should have everything ready to go for the due diligence process well in advance.
Another important issue is to make sure that you’ve had conversations with the key people who, when you do sell your business, are going to be affected by the outcome in some way. These would be people like family members, and many of the advisors that you work with, like financial planners, CPA’s, and attorneys. Make sure those people are clear on your intentions to eventually sell the business. They may have some critical input on what you need to do to prepare, as well.
Finally, I would recommend getting educated on the process of selling your business. There are several good books and blogs about what selling your business entails. Talk to people who have been through the process themselves, or work with people who go through it on a regular basis. Pretty much everyone will recommend that you have an understanding of the type of team you’ll need to have in place to get your business sold, and how to find and choose those people. Get them involved in the process -- especially deal professionals like business brokers and investment bankers -- earlier rather than later, and rely on them to help you with the preparation.