Selling a business is a time consuming and disruptive process that can often frustrate business owners. Taking the time to thoughtfully prepare for a sale can make the process easier and often provides insight into business costs and operations that can lead to initiatives benefitting the business, whether or not a sale occurs. Here are four ways to improve the sale process and achieve the highest possible price in the transaction.

Hire experienced advisers and involve them in the process early

Experienced advisers can help you determine what potential buyers will view as the strengths and weaknesses of your business and make suggestions for improving those weaknesses. They also can help you develop reasonable projections, understand potential valuation issues, such as add-backs and synergies, set a realistic expectation for a sale price and develop a story that justifies your valuation prior to a buyer starting due diligence.

Advisers frequently provide their greatest value early in the sale process. They can help organize the process, identify issues that are likely to come up in due diligence and plan ways to proactively discuss those issues with a buyer. A seller also has its greatest leverage early in the sale process and experienced advisers can help owners use that leverage to their benefit. If an owner shows up at an adviser’s office with a signed letter of intent, he or she likely will have lost an opportunity to negotiate the most favorable terms possible on important items such as indemnification.

Finally, experienced advisers will take stress off of an owner by being able to handle the day-to-day deal process and work directly with the buyer and its advisers, leaving the owner more time to continue to run the business.

Consider the sale price you need to maintain your lifestyle

Unfortunately, most advisers have heard a nightmare story about a business owner who sold his or her business at a good price, only to realize that the price wasn’t enough to accomplish what he or she wanted after closing. Owners frequently want to use a portion of their sale proceeds to fund charitable endeavors and need to consider whether they’ll be able to generate sufficient annual cash flow with the sale proceeds remaining after that charitable work to maintain their current lifestyle.

In planning their post-sale cash flow, owners should also consider expenses that have been funded through the business that may now need to be funded by the owner, such as health insurance and country club memberships. Finally, serial entrepreneurs may quickly be looking for their next project. While an entrepreneur may want to use sale proceeds to fund that next project, it’s important to limit that amount to avoid possibly putting too much of the sale proceeds at greater risk in a startup venture than they were in the more established sold company.

Clean up your books and records

In order to be comfortable with a valuation, a buyer needs to be able to review reliable financial statements based on quality accounting controls and methods. In addition, a buyer will expect to be able to quickly and easily confirm the ownership of a company by reviewing its corporate record book and will want to review the company’s material contracts. By planning ahead and cleaning up issues in advance, a seller will portray itself as a well-run business and provide a potential buyer the comfort needed to pay the highest possible valuation.

As part of a cleanup of the books, an owner should also consider whether the company owns any assets that are not directly related to the business, such as a vacation home or artwork, and transfer those items out of the company before starting the sale process.

Owners should pay particular attention to working capital, because a buyer will expect the business to have a normal level of working capital at closing. Many businesses could improve their management of working capital and reduce the amount of working capital a buyer will expect to receive at closing. This will create additional value for the owner, whether or not the business is sold.

Finally, as part of the self-evaluation process, an owner should consider changes and trends in the business over the past couple years and consider and implement projects to take advantages of those changes and trends.

Have a succession plan in place

Remember that a buyer is buying a business for the future, which often will not include you. If you’re not replaceable, a buyer will be concerned about the performance of the business going forward. As part of preparing for a sale, it is important to identify and develop a strong management team that can run a profitable business after the deal. Owners should analyze the processes where they are critical and determine how to make other employees important to those processes and train those employees to be able to take over leadership after closing. For top employees, an owner also may need to consider whether financial incentives are needed to keep those employees in place and working hard during the sale process. Owners should be careful to negotiate any transition period during which they will continue to work for the business early on during the sale process in order to avoid misunderstanding.

Owners should be thinking about the sale process several years in advance and understand that the process itself may be frustrating at times. The more prepared an owner is for a sale, however, the smoother the process is likely to go. In addition, in preparing for a sale, owners often learn ways to improve their business, whether or not a sale occurs.

Pete Van Euwen is a partner at BakerHostetler. He focuses his practice on mergers and acquisitions, financing and securities matters. He has extensive experience advising public and private companies in all aspects of acquisition, divestment and strategic investment transactions. You can reach Pete at [email protected].