1. Sell your company when its outlook is strong.

The best time to sell your company is when its prospects are good. A buyer will pay more for a company that is well positioned for future earnings growth.

2. Prepare ahead for the sale of your company.

Solicit advice from your M&A specialist early on in the process. An experienced advisor will assist you in evaluating all of your strategic alternatives and in determining whether selling is actually the best decision. In addition, if brought into the process early, an M&A advisor will help you position your company and its financial performance in the best possible light, keep you apprised of market and industry conditions, and gain a thorough historical perspective of your business so that your company can be best represented during the marketing process.

3. Develop a strong management team.

Most buyers want to know that there will be an ongoing management team able to successfully run the business after a sale. Incentives may be put in place to make sure that the management team remains intact through a sale process.

4. Build the company for the long run.

Avoid inflating short-term earnings at the expense of long-term growth. Buyers are sophisticated and will discover any earnings management during due diligence. The long-term prospects are critical to a buyer.

5. Surround yourself with financial and legal advisors who have significant M&A experience, and who understand your business and industry.

Expertise and knowledge can add value to a transaction. Advisors will contribute to the success of a transaction by: knowing who the qualified buyers are; structuring an organized and competitive process; understanding key legal and accounting issues; bringing skilled negotiation techniques to the table; and coaching you on the best ways to "market" your company.

6. Seek multiple and competitive bids for your company.

Sellers will reap the benefits of a competitive bidding process from both a financial and non-financial standpoint. In a competitive environment buyers are more likely to pay higher prices and agree to more favorable legal terms. A competitive process also gives you the opportunity to research and select the best buyer from a "fit" perspective.

7. Bring problem issues about your company to the table early in the process.

Communicating potentially negative issues to a buyer early in the sale process builds credibility and allows you to avoid having a deal fall apart at the eleventh hour.

8. Maintain deal momentum.

From initial marketing to deal completion, maintaining deal momentum is important. The due diligence process should be well-organized and expeditious, management's presentation should be well-rehearsed and thorough, data on the business operation should be accessible and organized, and a strict timeline for the transaction should be established.

9. Keep management's eye on the ball during the sale process.

Try to make sure that your business continues to run smoothly during the sale process and that the company continues to meet or exceed its plan. This builds confidence in your business with prospective buyers, as well as eliminates the high cost of negative surprises.

10. Don't underestimate the power of "marketing" your company.

A seller must communicate the strategic vision for the company and the opportunities that the buyer will have in growing and building the business.

© Boston Business Journal. May 21, 1999. Reprinted with permission. All Rights reserved.