Some time back I published some thought starters for those of you who want to get out of your business: retirement, diversification, bored, for whatever reason. Now that our new web is open for business, some of you have asked for that series to be re-published. Here’s the first in that 5-part series, written for those of you who want to sell to someone you don’t already know today.

If you want to sell your business in the next year and expect to get top dollar for it – you’re already too late. Virtually every business needs some preparation to get the best price. The time to start planning is 2 to 5 years ahead of time. So you can:

1. Beef up your balance sheet that has probably been ignored if the business is running smoothly. This is the first place a prospective buyer will look, because it’s a snapshot of the estimated value of your business.
2. Strengthen your margins and create a trend that shows stability or improvement that can reasonably be counted on to continue for the new owners.
3. Develop a management team that doesn’t depend on you to fill in the management gaps, unless you want to work for the new buyers.
4. Show promise of future growth in top line revenues, unless you plan on selling only to a life style buyer who simply wants to make a steady living with what you‘ve built. Not the highest potential buyer, but still an option.
5. Decide whether or not to engage outside help to prepare the business for sale – a consultant like me to improve the metrics, an investment banker or business broker to actually help you in marketing the business, etc.

That may not be good news for the over-anxious or under-prepared, but there’s a silver lining. The opportunities should continue for a couple years, so if you start now you could be just fine. If you wait a couple years before you start, good luck. You’ll need it.

Next post: passing it down the line. Stay tuned.