By Hayley Irvin

Selling your business can be a long and complicated process with many unforeseen twists and turns. Though you may sometimes feel rushed to sell, remember to take a few moments to consider your options and get advice from your financial team. To maximize your profits and avoid selling low, follow these ten easy steps you need to know when selling your business.

1. Figure out your ideal “sell by” date far in advance.

If retirement is on the horizon and you are considering selling your business, you should start thinking about selling at least six to twelve months before your ideal “sell by” date. Sometimes this process can take years, so the sooner you start planning the better off you will be in the long run. Take advantage of the time by planning ahead, consulting with brokers and financial advisors, gathering the necessary documents, and meeting with many buyers. Don’t ever settle for the first offer you get. With plenty of time, you don’t have to settle for second or third, either – only the best offer.

2. Start planning and researching valuation.

Once you’ve figured out when you want to sell, you should start researching valuation in the current market. This will give you a general idea of what similar businesses are currently going for on the open market, helping you decide whether or not it’s in your best interest to sell now or wait. Determining a realistic price range will also help you avoid overestimating your business’ value and feeling disappointed when you receive offers below what you think your company is worth.

3. Consult a broker or financial advisor.

You shouldn’t be alone when selling a business. It is a daunting and sometimes confusing task, both financially and psychologically. If you don’t have experience with M&A deals, you may miss some small but important details during the selling process, potentially costing yourself time, money, or both. Brokers can meet with prospective buyers when you cannot, and, like financial advisors, can help you file all of the necessary tax paperwork with the IRS. There’s an old saying that you have to spend money to make money, and brokers and financial advisors are certainly worth the investment.

4. Spread the word!

Selling a business is a bit like fishing – the wider the net you cast, you more fish you are likely to catch. Likewise, the more people who know that you are selling your business, the greater the number of potential buyers you will have. Brokers can also help widen your net and put you into contact with buyers with whom you may not have otherwise spoken. Planning ahead will give both you and your broker ample time to get the word out.

5. Start gathering important documents.

After you sign a Letter of Intent, your buyer will have sixty days to examine your books. You don’t want to be scrambling to find important documents for a buyer, so make it easier on both of you by compiling all important documents – tax forms, property deeds or leases, income reports, etc. – into easy navigable files as soon as possible. This will give buyers a favorable impression of your business and also make things easier for both parties when it comes time to seal the deal.

6. Be patient.

Don’t panic if offers don’t start pouring in the door the second you announce that your business is for sale. Good things come to those who wait, and that’s exactly what you may have to do to make sure you end up selling to the right person at the right price. If you start the selling process early enough, you should have plenty of time to wait until the best opportunity arises.

7. Pre-qualify potential buyers.

Do yourself a favor and don’t waste time with buyers who do not have a serious interest in acquiring your business or who may not currently be able to purchase it. Pre-qualifying buyers will not only help you weed out unlikely buyers, but it will also help you get a better idea of who your potential buyers are and what motivates them. Why are they interested in purchasing your business? What are their plans for it after the acquisition? Asking the right questions will help ensure that you sell to the right buyer.

8. Negotiate with buyers.

If you do not have experience with M&A deals, having a broker can come in handy at this step as well. There are many aspects of the selling process, from the assets being sold to the method of payment to non-compete agreements, so remember to plan ahead and bring along a list of important negotiation points. Don’t be surprised if your buyer has one, too. You can even have your broker or financial advisor draw up a term sheet or rough draft of the selling contract for your buyer and his or her financial team to look over.

9. Keep your options open.

Once you sign a Letter of Intent with one buyer, you will be unable to negotiate with other interested parties during the “due diligence” period that gives the buyer a set amount of time to examine your business’ records. The longer this period, the more likely other interested buyers will be to walk away. This is good for the buyer with whom you signed the LOI; the less interest you have, the less they can reasonably offer. And they can reduce their offer as times goes on. Don’t hamstring yourself and your profits by signing a Letter of Intent too early.

10. Complete all of the necessary tax forms.

When you and the buyer meet to sign the final contract, you’ll both need to fill out an 8594 form to file with your tax returns, in addition to other documents. Your broker, financial advisor, or accountant should be able to help you complete all of the other necessary paperwork. Take the time to be thorough the first time around – no one likes dealing with the IRS.

Selling a business isn’t a sprint to the finish line. You spent so much of your life building your company; why would you hurry and sell for less than you can earn? Don’t shortchange yourself and your years of hard work. Be patient, plan ahead, and wait for the right deal. Your future self will thank you for your diligence when you’re sitting on a beach in Hawaii sipping fruity drinks through umbrella straws.