Have you have been running your small business for years and you?ve decided it?s time to sell the business and relax? Do you need capital and have decided that selling your business is a good way to finance another business venture, pay for college, or pay off a mortgage? The reasons for selling a business vary greatly, but many of the potential pitfalls and the techniques for making sure you get the price you want are the same.
If you are preparing to sell your business or you are considering putting your business up for sale, follow the advice below to enhance your likelihood of selling your business successfully.

Sell for the right reasons
A sale has to be done for the right reason in order to be successful. Brokers say good reasons to sell include a desire to move on to something else, divorce, retirement, or death of a spouse.
Finances, on the other hand, are not considered a positive motivation for selling your business. When people want to use the proceeds to pay off a mortgage, or when financial considerations are the driving force for some other reason, the sale often does not happen. If a sale motivated by money does go through, it often takes a long time to sell, and frequently sells for a price significantly lower than what the owner hoped.
"When people try to sell for financial reasons they are almost always unrealistic about the worth of their company," says Jim Salvarakis, a lecturer on the topic of selling a business, and president of the brokerage company Connecticut Business investments, Inc. in Southport, CT. "Their price is not related to the marketplace because they have doubled the worth or more and the marketplace will just not net them that."

Don't let your books work against you
It is not news that many small business owners keep poor books and records, and these record keeping habits can be problematic when a business is for sale. For example, in a cash-based business, owners pocketing money instead of recording it on the books may find themselves forced to sell a business based on what is recorded, not what is actually made. This means that your business could be worth much more than you will be able to get for it.
To avoid this trap, plan ahead and have at least one full year of reported records before you try to sell. The latest 12-month results are the primary factor when a buyer is evaluating a business because purchasers are most concerned with what the business is doing currently. However, 2 or 3 years reflecting your full potential are preferable because they will help reassure a buyer that your business is worth what you are asking.
If you need to sell right away there are other ways you can prove to a buyer that you are doing more business than your books reveal. A buyer can evaluate your consumption of supplies and products. For example, a potential purchaser can look at a Laundromat?s water consumption or a pizza parlor?s flour purchases. There are a number of problems with this route -- it takes more time; a buyer may not want to dig for this information; opening up your business this way means that the IRS may also get wind of the fact that you are not reporting all of your income; and if you are not honest with the IRS, a buyer may wonder if you?re being up front about the business you are selling.
In manufacturing and service businesses, the cash-off-the-books factor is not an issue because their books and records tend to be in better shape and income is documented. But there are other stumbling blocks. Owners of these businesses tend to push tax benefits to the limit and funnel a lot of personal expenses through the business. This practice hurts when it is time to sell because it makes a business appear as though it has more expenses than it really does. Try as you might, you may not be able to convince a buyer that these activities are not necessary for the business. To avoid this problem, forgo perks for at least a year and keep only business on the books. This will maximize the price you can get for the business.

Helping yourself to sell
Once the process is underway and you have buyers interested in your small business, take some steps to increase the likelihood that your business will sell. Spruce up your business physically. Throw out garbage, take out all boxes stacked in the office, straighten that crooked door, paint the office, or whatever else is necessary to make your small business sell. This is often overlooked because owners don?t see a messy office or broken hinge anymore.
Before inviting buyers to look at your office or store, try to look at it as someone would see it for the first time. A messy office may indicate to some people that a business is sloppily run, and a buyer?s first impression is critical because emotional attachments are important to selling the business. You want to do everything in your power to help a buyer feel comfortable and able to overcome financial fear of buying a business.
Help yourself as well by being honest in all meetings with brokers or potential buyers. When you are meeting with a broker and or a buyer, paint a realistic picture of what your business is doing. A buyer or broker will find out the truth eventually and trying to present an overly rosy portrait is a big waste of time for everyone. Unless you come across as honest and truthful, a buyer will not believe what you say about the business.