By Suzanne De Lucia CBI, Fellow Of The IBBA

Most business owners assume that when they are ready to sell their business, buyers will be plentiful, that they will receive all cash at closing and that they will be able to exit the business shortly after the sale. The reality is that only one out of five businesses (20%) which go to market actually sells, many for far less than sellers expected and even fewer for all cash.

Most sellers carry part of the business sale in the form of a note and many have to stay for longer than desired transition periods. Here are some tips on how to ensure a sale of your business and to realize the maximum net proceeds from this all important asset.

1. Work with your professional advisors to position yourself and your business for sale. Your business broker, attorney, accountant, financial planner and business coach should all work as your team to help you exit your business on your terms and at your price. Make sure that you have realistic expectations about your business’s value in your investment portfolio, that your business financials are clean, and that your contracts and intellectual property are transferable.

2. Make your business financeable. If you wish to receive the maximum amount of your sale proceeds in cash, you need to have clean books and records prepared by a CPA. Your financials need to reflect all income and legitimate expenses and be free of personal or discretionary expenses. If your business can be financed, many more buyers will be able to purchase your company on desirable terms and conditions.

3. Work on, not in, your business. Business owners often work extraordinarily hard in their businesses, yet spend no time positioning the business for new ownership. Make sure your personal skill sets and relationships are not driving the business. Have a staff in place who can carry on the day-to-day operations without you. Systematize your business so that the income will be there for a new owner.

4. Sell when things are good. Everything works best for everyone involved when the business is sold at a time when things are going well. Buyers want profitable businesses which have upside potential. Too many business owners wait until burnout or unfavorable market conditions force a sale or closure of their company. Leave something on the table for the new owner and come out a winner.