If you’re planning to sell your Boston business, finding the right buyer can determine the future of your company, as well as how much you earn from the sale. Planning ahead is key, because the right planning can help you identify and attract the right buyer. Here are five tips for getting it right:

Get Organized

Buyers hate risk, and it’s risky for them to not know what they’re getting into. That’s why tying up loose ends is so important. You need clear, well-constructed contracts, clear ownership of all of your IP, and financial statements that are in order and accurate. Some strategies for getting prepared include:

• Ask an accountant to audit your financials.
• Have an IP attorney review all of your contracts to determine IP ownership.
• Set your business up such that you pay the lowest possible taxes.
• Review employment contracts
• Incentivize key employees to remain in place after the sale.

For the best results, begin preparing 12 to 18 months prior to the sale.

Understand Business Valuation

You might have an idea of how much you hope your business is worth, but valuation is complex. Earnings before interest, taxes, depreciation, and amortization (EBITDA) and cash flow are the main factors determining value. Some buyers, especially strategic buyers, will look to other factors as well, such as valuable IP, a strong management team, or an exceptional reputation and growth potential. An appraiser can help you estimate value ahead of the sale, and may also help you identify areas for improvement that could increase value before you put your company on the market.

Don’t Ignore Your Company

Buyers want to see a steady trend of improved profits—not a sudden decline right before they take over. So don’t let your zeal for the sale distract you from the daily demands of running your company. Hiring a Boston business broker can help you appropriately divide your time between running the business and overseeing the complex demands of a business sale.

Have Clear, Specific Answers to Buyer Questions

Buyers don’t want big promises and flashy marketing. They want clear, specific answers to their questions so they can envision themselves at the helm of your company. Be prepared to explain to your buyer why you are selling, and to tell the story of your company in so doing. You’ll also need to prepare for due diligence, during which you’ll do more than answer questions. You’ll need to document every assertion you’ve made about the company, and prove to the buyer that your company is a sound investment. The right advisory team can help you prepare for this often-exhausting undertaking.

Have a Post-Sale Plan

What comes next? And how much money do you need to make that dream a reality? Part of successfully selling your business is having a clear plan for what comes next. If you don’t, you might unintentionally sabotage the sale—or fail to bring in enough from the sale to help fund whatever you intend to do next.

Have a plan for after you sell

Finally, you should have a plan for what you’ll do after you sell the business. Even if you’re selling the business to retire and spend more time with family, you should still have personal goals you’re working towards. Without them, you’ll likely find yourself bored and unmotivated.

And give yourself some time before you spend any of the profits from the sale. This will give you a chance to learn what your tax responsibilities are and to think through your financial goals.