Taking the time to get these 8 items in order might make all the difference when seeking a buyer for your business.

A lot of us don’t want to plan for it. We don’t even want to think about it. But the fact is an external sale is probably the best way to get the highest value for your firm AND might be the best way to ensure its survival and provide ongoing opportunities for your people. So, let’s say you think an external sale may be in your future: What can you do to make your firm more attractive to buyers? Here are my thoughts:

1. Have a good business plan. It helps build potential buyers’ confidence when they see you have your act together in the form of a solid business plan. What is your mission and vision? What are your strategies and goals? And what specific actions will you take to accomplish them? These questions and more should be answered, and you should be willing to share your plan with potential buyers.
2. Be a growing firm. When you have a history of growth, your buyers will have projections for continuing growth. That growth will result in higher EBIT (earnings before interest and taxes – and bonuses) projections and have a positive impact on your value.
3. Be profitable. Every buyer looks at multiples of EBIT. To a great extent, the more profitable you are, the higher your valuation will be. And the buyers will have a greater confidence that your system works.
4. Have a strong second tier of management. Anyone who is considering buying your company is more interested in the people who work for you than they are you. Once you sell your company, odds are you will either be less motivated or out. So the people who work for you are extremely critical to a buyer!
5. Have a named successor. Who specifically will take over your business? Who is ready to run it? It is crucial to you and to any buyer that someone is ready to assume the top job.
6. Clean up your books. Get all your personal stuff out of the company. If your office is leased from you, are you overcharging for it? Do you have a condo or boat on the books that the company is paying for? Is Mom getting a paycheck but not showing up for work? Get all this stuff off the books; buyers don’t want to see it.
7. Have good accounting. This is so critical. We work for buyers and find sellers who can’t even give us a balance sheet or any kind of profit and loss statement that wasn’t scratched together in a spreadsheet. Audited financials are best. Reviewed are second-best. Accountant-prepared compilations are third-best.
8. Clean up your office. Don’t have a dump! Buyers will surely want to see your workplace. Clean the carpet. Empty the spare offices of the old furniture piled up in there. Toss the old magazines in the lobby. Change the light bulbs. Clean the kitchen.

MARK ZWEIG is founder and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.