10 Key Moves When Selling Your Small Business

When it comes to selling a business, organized, detail-oriented people have it all over the rest of us. Good records can mean the difference between selling for millions—or not selling at all. To sell well:

1) Get on good terms with the tax man. Got an extension for filing your taxes? Pay them now. "You don't want to do anything that is going to scare the buyer once they're there and have them walk away," says Colby Sambrotto, founder of BizTrader.com, a website for buyers and sellers.

2) With your accountant, review your financial statements for at least the last three or four years. Most small business owners deduct legitimate perks—vehicle use, higher-than-average salaries, and so forth. You'll need to "add back" these discretionary expenses so that a buyer can see what it will truly cost her to run your business. Depending on the buyer, you may need to have your financials audited as well.

3) If you've been mixing personal expenses with business, stop. At the very least, it's confusing to a buyer, but it can queer a deal altogether.

4) Spruce up your facility, like you would if you were selling your house. Fresh paint matters. Be proud.

5) Follow the rules. If your industry is regulated, make sure you're complying with every regulation and that you can prove it with the necessary documents.

6) Get help valuing your business. Assessing valuation can be complex, especially if your business is unusual. A good accountant familiar with valuation methods can help, and you can also pay a broker a few hundred dollars to get a rough valuation. Some websites—BizTrader.com and BizBuySell.com, for two—offer do-it-yourself tools as well. Larger companies may want to pay for a certified appraisal, which can cost $10,000 or more.

7) Examine your customer list. If you're relying heavily on one or two large accounts, start diversifying. Dependence on a few large customers is a liability.

8) Get out of the way! Buyers don't like businesses that will fall apart if you're not there to run everything.

9) Create or update operating manuals. Document how you do things so that a stranger can follow the instructions.

10) Don't insist on an all-cash deal. Buyers expect a 20-percent discount for paying 100 percent up front.