You’ve spent much of your career competing against other businesses. As you near retirement, though, a competitor may be the best option for a lucrative exit that allows your business to continue your legacy. Selling to a competitor requires significant due diligence, particularly in the early stages when some competitors may use a sale ruse as a way to gain access to trade secrets or a competitive edge. These strategies can help you minimize risk while maximizing the value of your exit package: 

1. Know how much your business is worth. Competitors always try to get away with paying less. An appraisal helps you determine what the market will bear. 
2. Don’t lead with your emotions. Your business is your baby, and subjecting your baby to the judgment of a competitor can be painful. Don’t let distrust, resentment, and ego undermine the sale process. If you can’t separate your emotions from the deal, hire an intermediary who can manage the process for you. 
3. Be cautious. Your instinctive distrust of competitors is not misplaced. Don’t divulge information too quickly—especially to a very eager or very friendly competitor. Your competitor might be using that friendly eagerness as a ruse to gain access to your business.
4. Get as much as you can from the deal. Aside from final sale price, it’s important to look at other deal terms that an be a source of value. Can you stay on as a contractor or consultant? What about a limited non-compete agreement? Who assumes debts, accounts payable, and other expenses? 
5. Due diligence is vital. Due diligence is the first formal step in the M&A journey. It requires significant time and resources, as well as the expert insight of legal and financial analysts. Be prepared to make clear disclosures. And don’t forget to conduct a due diligence process of your own to ensure the buyer is truly prepared to take ownership of your business. 
6. Know your deal partner. Smaller companies are more likely to cheat because they’re less likely to suffer serious penalties or loss of goodwill. So if you’re not working with a large competitor, make sure you know the reputation of the person whom you are partnering with. Get references, and ask around before committing too deeply to the deal. A person’s reputation can reveal a lot. 
7. Ensure you’re emotionally prepared to sell. If you don’t have an exit plan or feel lukewarm about the sale, that will come through loud and clear. It can disrupt negotiations and ultimately kill the deal. 
8. Ask pointed questions. Many first-time sellers worry that digging too deeply will scare away their deal partner. You need, however, to carefully evaluate the deal. Ask what your deal partner wants, and set clear and specific criteria for moving forward with the deal. If this scares them off, the deal wasn’t going to go anywhere anyway. 
9. Get paid upfront. Get as much as you can upfront. Stock has a more uncertain future. Likewise, an earnout can make you beholden to the buyer, and dependent on factors you cannot fully control. Treat the value you get now as potentially the only money you will ever see, and proceed accordingly. 
10. Take control of the process early. By taking control early, you set the tone of due diligence, establish the timeline, and manage the transaction. This can help you reach a more favorable agreement. 
11. Don’t forget about your business. Don’t lose your focus during negotiations and allow your business to fall apart. Continue overseeing daily operations, and ensure your employees feel taken care of and valued. Nothing erodes value faster than a mass exodus. 
12. Don’t neglect the NDA. No matter how great the deal seems, no matter how qualified your competitor is, you cannot blindly trust anyone—especially not when you’re handing over trade secrets. Work with your legal team to construct an airtight NDA with real teeth, including hefty damages for violating the NDA and attorney’s fees for enforcing the agreement.