Eight Ways to Prep Small Business for Sale

By Sharon McLoone

NEW YORK (TheStreet) -- There are a lot of reasons small businesses go up for sale. It could be something as simple as owner boredom or burnout, something serious like death or divorce or something common like a serial entrepreneur who's ready to skydive into the next endeavor.

Once a business owner is ready to proceed and is committed to relinquishing ownership, there are basic steps and fine-tuning to be done in order to get the best price.

Most experts recommend that a seller have a two- to three-year window to prepare for selling a business. It's imperative that a healthy business for sale has respectable revenue and profitability, says Don Naideck, president of North Bethesda, Md.-based Prime Investments, a seller of firms valued between $500,000 and $25 million in the Mid-Atlantic area.

It's also important to attract more than one buyer, says Marian Cook, president of Ageos, a consultancy in Wheaton, Ill., that prepares firms for sale and helps with the transition. "Having only one bid is the same as having none. You don't know if you're getting the best deal."

Here are eight tips to review if you're thinking of selling your business:

Keep it confidential: Naideck recommends that the process of selling is kept absolutely confidential from employees, as hard as that may be sometimes. "If you think you have a sale and it falls apart, everyone knows you want to sell," he says. Employees are likely to start looking for other jobs. If word gets out in the marketplace, competitors can sell against that and suppliers may put you on cash on delivery.