I’ve sold two companies, and the sales were vastly different experiences, with wildly different results.  When I was approached about the sale of my first company, I wasn’t looking to sell.  I loved what I was doing, and the company was very attractive to the person who ended up purchasing it.  I made big bucks off that first deal.

Fast forward a few years to the sale of my second company.  My partner and I were very motivated to sell.  We were actively soliciting investors, and what turned out to be a very long process was ultimately not very profitable for us.  We didn’t make as much as we’d hoped to.

The lesson:  Desperation isn’t attractive.  If and when I ever sell another company, I’ll be much better prepared to maximize my profitability by following these steps:

1. Realize what acquirers are looking for.  People buy companies for a number of different reasons, and if you can figure out what your buyer wants, you can position yourself to your advantage.  Some purchases are strategic acquisitions – your office cleaning company (with its client list and equipment) is attractive to a home cleaning business looking to expand.  Other purchases are defensive – your company is the chief competition, and buy purchasing you, your competitor is poised to dominate the marketplace.  Other purchases are simply to generate revenue – allowing the buyer to streamline processes and cut costs by consolidating.  Find out what your buyer wants.

2. Know that it’s a long process.  My first sale – the most profitable one – took two months.  I blinked and it was over, but that’s most definitely not the norm.  My second sale took eight long months (that felt like eight years.)  A process that long can put your business in serious trouble if you concentrate all your energy on pushing the sale through, rather than maintaining and growing your company.  Sales do occasionally fall through, and it’s essential that you have an exit strategy – a plan B in the event that you can’t make the sale.

3. Get as many bidders involved as possible.  Ever been to an auction and seen people get so involved in the thrill of bidding that they end up blowing their budget just to win the contest?  Bidding (and buying) is an emotional process, and you can use that drive to win to your advantage.

4. Get an investment banker or a business broker to handle the sale with you.  Your business is your baby.  You’re emotionally wrapped up in it, and since you’re going to be working to keep that business profitable during the process of the sale, you need someone who’s more detached to keep an eye on the maximum return.  A banker or broker will get you a premium price and let you keep the business alive.

5. Profitability is key.  Lots of things go into establishing the value of a business – innovation, intellectual property, client base – but by far the most important element is the proven profitability of your company over time.  You want a steady, strong history of making money.  Minimize unnecessary expenditures and maximize your company’s profitability, and you’re improving your chances of selling for big bucks.

6. The riches are in the niches.  If you’re providing a unique service to a dedicated, loyal group of satisfied customers, you’re poised to cash in big.  It’s much harder for a bigger business to swallow you up on the cheap if you’re thriving in a niche market.

7. Make yourself dispensable.  If you can subtract your ego and your involvement from your business, you’re adding to its value.  Your business is much more valuable if it can run without you.  Start scheduling and taking vacations and force your business to flourish on its own, demonstrating that the company will continue to thrive even after you no longer own it.

So here’s the secret to all of these steps:  these are all things you should be doing anyway – things that make your company more efficient and profitable whether you plan to sell it or not.  Your goal in prepping for the sale of your company should be to whip it into the best shape you can in order to boost its value.  What you don’t want is to spend months trying to push for a sale and watch your business wither from neglect, only to have the sale fall through and leave you with a worthless business.  Your best bet is to continue to grow your business, right up until the day you get that big check and hand over the keys.