It was a real eye-opening experience when Andy Cohen sold his first company. The Founder and CEO of 7th Street Advisors, and Founder and Former CEO of Water Water says he's an operator who spends most of his time inside the business. What he learned from the process is that the things you do or aren't doing are impacting the price you're going to get for the business.

"Any buyer wants to take over a business that has infrastructure that's created, systems that are new, people that are engaged and want to stay on, all the processes that it takes so it's a seamless exercise," he says. "Even things like audited financial statements, SWOT analysis, all those typical things, folks that are ingrained in their industry. So much of that can impact a sale price or even the decision of a buyer to buy or not."

Speaking on a Baltimore Smart Business Dealmakers Conference panel titled, Maximizing Value in your Sell-Side Transactions, moderated by Saul Ewing Arnstein Lehr LLP Partner Eric Orlinsky, Slate Capital Group Partner Parker Davis says that being prepared is important heading into a sale process. And so is honesty.

"It's important to be honest with yourself about the warts of the business, the risks of the business," Davis says. "Is there customer concentration? Are there key people involved that the company cannot do without? Is there supplier concentration? Maybe there's some competitive risks. Buyers are going to uncover these things though a process. It may not be a problem, but you need to be honest with yourself and how you're going to deal with them."

Being clear about potential risks in a sale can lead to opportunity, he says.

"The private equity group might be able to help diversify the revenue base, maybe bring on some additional firepower from the management perspective, such that you don't have these risks when you get that second bite of the apple," he says.

But going into a sale, it isn't just the buyer scrutinizing the seller. Former Ellicott Dredges Enterprises CEO and Founder of the Peter Bowe and Barbara Stewart Foundation, Peter Bowe says when he was going through a process he had a short list of buyers that was whittled down to the top three based largely on price. They decided to go with the buyer that could close the quickest. However, after an all-night negotiating session, the buyer re-traded the very next morning.

"I think the hardest decision I made in the whole process was saying goodbye to that firm," Bowe says. "How can I work with you if you've just done this to me?"

Ultimately, they were able to do the deal with another buyer on the list and negotiate a higher price with a partner he says did everything they said they would do.

Cohen says evaluating the buyer starts with understanding the state of the relationship post sale — will the buyer stay involved, maintain an equity position, will there be an earn-out, is there seller financing?

"Clearly, if an entrepreneur is going to stay involved or retain equity, there's got to be a symbiotic relationship between the parties," he says. "And I've experienced both sides of them. The one thing for sure is the seller is going to make changes, and when sellers make changes to entrepreneurs' companies that they started and built with their own blood, sweat and tears, it doesn't always go that well for the entrepreneur. So, just making sure that there's a good vibe between the parties, that visions match, strategies match, how you're going to treat people, morals, ethics, all those things are good matches, especially if you're staying involved."

Davis says on the buy side, how they'll treat the people after a sale is a top question.

"The road ahead is super important to sellers, given the blood, sweat and tears that they put into the company," he says.

He notes that not all buyers are equally capable of financing a deal, so it's important for sellers to ask questions such as, where are they in their fund because timing matters, particularly to private equity funds. Do they have financing lined up? It's important to understand their ability to not only carry through from a financial perspective, but carry through on what they say they're going to do.