Even if you are years away from selling your company reading this article could help you generate thousands of dollars more than you expected. Better to prepare now than later.

Organize your thoughts and your transition steps:

• Always prepare monthly financial statements. You must have current P&Ls and a balance sheet. Do not allow anyone to dissuade you from receiving this vital information in a timely manner.
• Find out what your CPA will charge you to produce audited statements. You may be years away from selling but buyers will be impressed that you went to the expense and effort to run audited financials. You cant imagine the trust and credibility that you will generate when you show a buyer and his financial team years of not only accurate but honest books.
• Keep perfect asset records. Each capital purchase should identify the name of the manufacturer, the type of machine/equipment, serial number, cost, date of purchase, age of machine at time of purchase, proposed uses of machine, and depreciation methods used.
• Have written job descriptions for each supervisorial position in your company.
• Have a short, but comprehensive business plan that is fresh, workable, and not hidden deep inside a file cabinet drawer. This plan includes content and financial pro-formas.
• Run cash flow forecasts quarterly and be sure they cover the next 4 quarters of your fiscal year.

Do these tasks because.

• How can you run your business day to day without themeven if you never plan to sell your company?
• You will run the business better, with greater profitability if you do use them
• Buyers love profitsdont forget to make money.
• Buyers are impressed with well organized companies with clean and sequential financial documents. Believe meyou will be able to sell for more money when buyers and their teams have trust in your records.

You wont have to tell what I call stories. Stories are nothing more than excuses to rationalize why a buyer should not be too concerned when the numbers dont add up and/or the seller wants more money for the company than can be justified in the books Be absolutely sure that all your customers are in a data base that is electronically current. Besides all the normal identification information list the customers email address and Website address if there is one. Show all contact people and which department. Install ACT or GOLDMINE contact management programs and you will be in superb hands. Remember that your customer list is more important than all your assetsexcept for your employees.

Begin planning for a sale at least two years before going to the marketplace; but if you sense a declining market for your goods and services you may need to accelerate your timetable. Try to sell when your business is prospering. Unless you want to die at your desk at 100 years of age, you will receive the best price when there is still upside. Buyers will buy into upside but they for sure arent excited about downside trends. Would you buy a business where the seller is telling you stories about why his business has plateaued? Neither would I.

As soon as you decide that that youre definitely going to sell, hire an experienced Business Broker/Intermediary. Do not engage your CPA to function as your sales representative. Never hire your attorney to help you sell the business. To be sure, there is a place for your CPA and your attorney to become involved but that time is way down the selling road. Obtain an independent valuation of your company. Depending on the size and the complexity of the business, these valuations are relatively inexpensive. Your accountant may argue that he can produce a valuation but his valuation isnt credible because he works for you. You need to have a neutral third party complete the appraisal for your company.