Family owned or closely held business owners thinking about selling all or part of the business need to be totally ready to go to market, says Prospect Partners Co-Founder Louis Kenter.

"You can't just decide to enter the market because it's a good time to sell, because Biden may change the tax law this month, let's run to market," he says. "You should have been thinking about this years in advance."

There are so many things that need to be prepared before going to market and most sellers have never sold a business before.

"Most entrepreneurs sell a business once, maybe twice, but that's it," he says. "They're not experts in selling and going through this process. It's a complicated process."

One of the first things an owner should be able to do ahead of a sale is address issues in the business. That means looking at your management team — are they ready for the transaction and is everyone on board with your plans to exit this business.

"Have you told the rest of your management team, 'I'm leaving? I'm going to sell the company and you guys are going to march on?'" Kenter says. "Many times, the owners, just because the way they've run the business, they tend to keep the information flow to themselves. There's no right or wrong way to do that but at some point, the rest of the people have to know, especially your senior management team, what you're planning."

There also could be issues that you need to plan for in advance before engaging an investment banker to go forward. For instance, if the company had one good year after five years of losses, Kenter says that's always a tough sale.

"You need to have the perspective of the buyer when you're thinking about trying to sell and that means looking at your own financial history, is your management team ready, are there any weird things going on in the market — is something going on in the marketplace that's obvious everyone will know; is something going on with your major customers — just an overall review of what's ready and make sure you can answer those questions," he says.

Your company also needs to be ready for a deep dive by an outsider that's going to look at all the details of your financials. Kenter says not knowing your company's numbers, or have an explanation for certain financial discrepancies, doesn't give a deal adviser a lot of confidence that you're ready for a process.

Business owners should understand that, since most have never done this before, it's not a sign of a lack of business acumen. That's why it's important to connect with a partner who can help you understand what is realistic to exit.

"'If I’m going to sell this business, what can I expect?' is a really complicated question and it's not straightforward and it's not something everyone is obvious to understand," Kenter says. "There's a lot of country club talk: Hey, I sold my company for 10 times EBITDA, or, Hey, companies like this are selling for 20 times EBITDA, just look at what Facebook's trading for today.' You have to get a realistic point of view from someone from the outside that doesn't have the baggage of maybe your 30 years in that business."

He says it's good to get more than one opinion heading into a potential sale. So, find an adviser that you like and trust. Do reference checking to figure out who that person is going to be and then listen to them because they're probably going to have a lot of advice that maybe sometimes is tough to hear.

Kenter spoke at the Chicago Smart Business Dealmakers Conference about steps a business owner should take to prepare to sell their company. Hit play to catch the full panel discussion.