When the time comes to sell your business, there is one consideration that will likely stand out among all others in your mind: valuation. No matter the time of the sale — years after starting your business or months after purchasing it — high valuation is always a priority. However, many owners fail to put in the due diligence necessary to ensure that they get the value that they desire.

In order to avoid potentially costly mistakes, you should develop an exit strategy well in advance of a sale (preferably with the help of trusted advisors). When doing so, keep these key things in mind:

Define Your Priorities — What You Need from the Sale

When you finally make the decision to put your company up for sale, you’ll need to analyze your priorities to be able to make every other decision along the way. To do this right, you’ll need to put on your humility hat, ask yourself many important questions and answer them frankly.

Some typical questions include: What is your minimum selling price to be financially secure? What kind of legacy do you want to leave behind (consider how the sale impacts family, community, friends, etc.)? Do you want your company to retain the same structure and culture, post-sale? Are you ok with a total departure?

Answering questions like this will give you a much better idea of what it will mean to maximize value in the transaction.

Who to Sell to

Once you’ve set your priorities, it will be clear which type of buyer you need to target. Prospective buyers range from strategic investors, institutional private equity groups (otherwise known as financial buyers), management, family, and maybe even friends.

Realize that selling to someone within your company’s management, family, or friends may leave you sacrificing price for the preservation of your legacy and culture. That’s where your priorities can have a direct effect on valuation.

Many sellers are focused on selling for price, and therefore target strategic and financial buyers. Strategic buyers can be either private or public companies. Most are hoping to grow by diversifying product offerings, expanding customer bases, enlarging geographic reach and increasing productivity and profitability. Financial buyers, on the other hand, focus on investing in companies with the goal of building value and reselling. These buyers tend to seek a minority or majority stake and develop a partnership with current owners in order to focus on recapitalization.

Researching prospective buyers prior to making a deal will allow you to identify buyers who are most likely to offer the best value as well as help you make make your business as attractive as possible.

What Can You Accept

When it comes to selling a business, owners often get caught up in the initial offer’s numbers. While this is obviously an important aspect, overlooking the many other important details (like terms, deal structure and net proceeds after taxes), can lead to financial conflicts down the line.

Of course, base your negotiation on what you know you need from the sale, which is determined by your priorities. However, realize that it’s important to remain flexible with prospective buyers. You leave open possibilities for negotiation on a range of details that can help increase the total value of the transaction.

Note: It is especially important to take a look at your tax liability at the expected time of sale. It is possible to take steps to minimize or defer your taxes, which could result in significant savings.

Timing of Sale

Choosing the right time to sell can have a significant effect on your company’s value. It’s always a good idea to wait for a strong economy, if you can. This way it’s generally easier for buyers to obtain credit, which they may be willing to do to pay for the company.

However, don’t fret if you are looking to sell and can’t wait for the economy to get with the program. While a growing industry promotes higher demand for companies in that area, consolidation periods can also be beneficial because larger competitors may be interested in buying your company at a competitive price. It’s simply a matter of acting strategically.

Of course, there are many internal variables that affect a buyer’s willingness to pay what you are looking for, including your company’s financial performance (EBITDA), workforce factors and industry growth. It’s important to take steps to make each of these a net positive on a valuation, no matter the timing.

Keep Calm and Carry On

The true purpose of a valuation is to get the seller and prospective buyer on the same page. As the seller, it gives you (someone with an emotional and vested interest in the company) the opportunity to see the transaction from the eyes of the buyer. It’s a fallible process and shouldn’t be viewed simply as the starting price point for negotiations.

There is a lot to consider when selling your business, especially if you’re looking to maximize your company’s value. It is critical to both act early and to assemble the right team of experienced advisors to provide guidance on an array of issues.