If a client is planning on selling her business, there are a variety of issues she must consider. Careful planning is critical to a profitable sale.

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The Canadian Institute of Chartered Business Valuators offers the following tips.

1. Develop a business plan. A formal plan identifies challenges and opportunities, as well as demonstrates that a business is ready for transition. The plan should address what makes a business unique from the competition and how it differentiates itself to ensure a competitive advantage. It should also include a viable strategy that speaks to sustainable growth.

2. Build a solid management team that can maintain and grow the business with the same commitment, skills, knowledge, and vision that made it desirable to an investor in the first place. Non-competition and post-acquisition consulting agreements can also support a long-term sustainable business.

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3. Update information systems. Robust, cost-effective information systems give potential buyers confidence that they’ll have access to accurate data that drives more informed decision making.

4. Understand the market. Buyers typically pay the highest price in advance of a company hitting its peak growth cycle. Market research and understanding the stage a business is at, relative to the industry’s growth cycle, is critical.

5. Know the true value of the business. Often the value of a business is greater than its tangible assets. This premium represents goodwill, which consists of intangible attributes such as reputation, brand recognition and customer relationships. Understanding this will lessen the likelihood of leaving money on the table.

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6. Increase value. Since value is often directly related to cash flow from operations, look at how this cash flow, as well as cost efficiencies, can be increased. Buyers will want to know about available cash flow going forward, not just historic levels. Then in determining a normalized cash flow, adjustments should be made for remuneration paid to owners, as well as discretionary personal and non-recurring expenses.

7. Optimize the balance sheet structure. Value can be added by removing non-operating assets that are redundant to operations, minimizing inventory levels, and evaluating the condition of capital equipment and debt-financing levels.

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8. Do some housekeeping. Make sure all corporate statements and agreements, such as contracts, leases, insurance policies, customer/supplier lists and tax filings, are up to date and readily accessible.

9. Maximize value by minimizing tax. Businesses need to seek tax advice early and structure their companies appropriately before any major changes or investment status can take place. Plus, tax-planning strategies can increase capital gains exemptions, thereby improving the shareholder’s bottom line.

10. Think ahead. Succession planning should be part of long-term goals for the company, but also the business owner. Growth and increasing the value of the business is integral to retirement plans, so have a sense of who is in line to succeed. Buyers will want to see that plan.