There are a number of things which you can do to prepare your business for sale; here is our advice. Preparing your company for sale is the only way to maximizing the amount of money a buyer is willing to pay.

Timescales also play an important role - it is important to note that it can take 12 months to sell a business and may also require an on-going commitment during a transition period.

1. The Value of my company

Be realistic - try to understand the real value for your company and use this as the foundation for any sales process. The value of your company needs to be objective, related to your industry and from a third party source.

Knowing the value of the business will give an indication and will allow you to understand how buyer's offers stand. It will also tell you your company's competitiveness, financial situation, strengths and weaknesses.

Obtain a valuation from an accountant or an experienced business broker. The organisation performing the valuation must have access to current accounts and forecasts. Most importantly, any business broker needs to understand current industry sentiment and having a clear sector understanding is imperative.

2. Accounts

A buyer is most likely to need 3 years of accounts. If your accounts are professional and well prepared you will make a much better impression with the potential buyer. Well prepared accounts also make due diligence simpler, quicker and cheaper.

3. What is the business' true profitability?

SMEs frequently claim a variety of non-operational expenses as a way of minimising their bottom line for tax reasons. It is vital to understand what these claims are and have the necessary evidence to demonstrate why they should be excluded.

In addition, there may be infrequent expenses (often called "one-offs") that the business has incurred during the past three years that should be excluded in a buyer's analysis of recurring cash flow.

4. Financials

A good financial expert will help you understand both the personal and corporate tax situation which is imperative. Understanding your tax situation will determine timing and also often influences the structure of the deal.

5. Legal and statuary paperwork

Review documents such as incorporation papers, permits, licensing agreements, employment contracts, leases, customer and vendor contracts. In addition, they must be available, current and in order.

6. Succession planning

How will the buyer be supported after the sale. A succession plan must be in place before the business is marketed. An area for particular focus is to show the buyer how the day-to-day activities of the sellers will be replaced.

7. Divestiture motivation

Buyers always want to know why you are selling. Be prepared to articulate your reasons and make sure they are genuine.

8. Build your advisory team

Strongly consider hiring an intermediary, either a business broker or an investment banker, to represent you and help you through the selling process. Start interviewing business brokers, legal representatives and accountants who are proficient in mergers and acquisitions.

The most important aspect of selling a business is to focus on the core business activity and not become distracted with the sale. If your business suffers it will give the potential buyer an excuse to lower the price. A good advisory team will understand the need to focus on the business and will allow you to do this.