Selling a business can be a long and arduous process. Unfortunately, many business owners don’t realize what they don’t know about the process until it’s too late. According to PriceWaterhouse Coopers, the primary reason business owners fail to achieve their desired outcome is a lack of adequate planning. The only way to ensure a successful outcome from your business’s sale is to do the necessary planning in advance of the time you expect to sell it. Your business sale plan should center on four key questions.

What are Your Sale Objectives?

If you don’t know what you want to achieve with your business sale, how can you know if you reached the desired outcome? A clearly defined business sale objective is essential to developing the right strategy and properly structuring the sale process for the best possible outcome. Your sale objectives should be linked to your exit plan to ensure your financial and business goals are met.

What is Your Exit Strategy?

Business owners who sell their businesses without an exit strategy are often disappointed in the outcome. That’s because they haven’t thought through critical aspects of their exit, such as the right timing, having a plan for maximizing the value of their business, having a plan for ensuring the business’s continuity, or a plan to provide their own financial security. Your exit strategy should be based on your clearly defined personal and business goals, which will also dictate, in large part, the sale strategy.

Is Your Business Saleable?

Business owners tend to view their businesses in a positive light. However, it’s essential to view your business from a potential buyer’s perspective. In other words, be able to honestly answer the question, "Would I buy this business?" That may enable you to focus on the negative aspects of your business while building on the positives. Key factors such as market position, profitability, solvency, staff, management capabilities, and customer base must be evaluated from a buyer’s perspective.

Do You Know What Your Business is Worth?

Most business owners don’t have a realistic idea of what their business is worth. Those who do keep score tend to overestimate its value. In reality, there are no valid rules of thumb for valuing a business. Valuing a business is similar to valuing real estate because the market sets the price. But a business sale is much more complicated than a real estate sale because it involves many more components and variables.

Many business owners make the mistake of waiting until they are about to sell before valuing their business. There are many reasons why you should value your business well in advance of selling your business. At a minimum, it offers the opportunity to work on those aspects of your business that can help to increase its value.

Do You Know How the Business Sale Process Works?

Your business’s sale process will depend greatly on your motivation for selling. If you need to sell the business quickly, you may have to accept a lower price and be willing to take some shortcuts. If you want the highest possible price to achieve your sale objectives, you may have to endure a more drawn-out process. If your aim is to transfer the business internally to a family member or employee, your deal structure will differ from a sale to a third party.

If your goal is to optimize both the sale price and your opportunity to achieve specific objectives, your process should begin by identifying and engaging a highly qualified, independent business intermediary who will only represent your interests.

Who will be the Key Players of Your Sale Team?

Although your sale target date may be years away, it would be essential to identify the key players of your team early on. Your CPA can help you start planning for a liquidity event that will have significant tax implications. Your financial advisor can help you prepare to transition your wealth from your business to an investment portfolio. A business broker can help you arrange for a business valuation to identify opportunities for increasing the value of your business. Although you won’t need an attorney until the sale begins, having one lined up doesn’t hurt.

There is a lot at stake when selling your business, and with everything that can go wrong, it is critically important to start forming a team of trusted advisors who can help you plan for the best possible outcome.