According to the Small Business Administration, there are more than 26 million businesses in the United States that employ fewer than 20 people, and many of those companies are run by Baby Boomers. With more than 3.2 million owners already in their 60s, many might be looking toward retirement.

Moreover, the National Small Business Association reports that one-third of those who own smaller companies may have to sell or liquidate part of their businesses this year for estate planning reasons. That means a lot of small businesses will be up for sale, a task that Eric R. Voth believes may not be as easy or quick as some Boomers think.

“Exit planning takes time, and preparation is the key,” said Voth, a business consultant and investor, as well as the author of How to Sell Your Privately Owned Company: A Basic Guide for Independent Business Owners, Baby Boomer’s Edition, from ERV Productions Inc. “You can’t just hang out a ‘For Sale’ sign and expect to find the right buyer who will offer you the right price. Business owners need to begin by preparing their assets, just like they were preparing a house or a car for sale.”

Voth’s experience is that many business owners do very little to get ready to sell until a few weeks before deciding to accept offers, which is not the best strategy.

“In truth, many company chiefs leave the task of preparing their company for buyers until the last minute, figuratively,” Voth said. “They proceed from the fallacy that their company will be attractive on its own merits, as if a prospective buyer will just stop by and kick the tires before taking out the checkbook. Would you buy a car like that? Not likely. So what makes business owners think investors and buyers would do the same? Most companies take bids just to choose an office supply vendor, so they need to expect more than just cursory due diligence from a buyer for their company.”

First impressions are important, so Voth recommends examining the following:

• Is your parking lot in poor repair?

• Are the shrubs overgrown?

• Do you have enough space for employees, handicapped persons, and visitors?

• Is there trash on your property?

• Has the entrance way been swept or shoveled?

• Is your reception area or foyer neat and clean?

• Are visitors greeted quickly and with courtesy?

• What are your employees doing? Are they busy, or are they talking, waiting around, and drinking coffee?

• Are their desks and filing areas neat or cluttered? How is your lighting?

• Do the walls need paint, is the carpet worn, and does everything look “dated”?

Those elements address the physical appearance of your business. To address the inner, financial appearance, Voth recommends bringing on professional assistance to ready your business for sale.

“Most successful business owners are experts in selling their products and services, but that doesn’t necessarily make them experts at selling their company,” Voth said. “If you wouldn’t file your company’s taxes without using a tax professional, then why would you want to risk a serious undertaking like selling your company without using professional services for that, as well? There are specialists in the field who can help coordinate and manage the different aspects and administrative issues. Business owners should not expect they can manage all of those functions alone, and still actively run their businesses while they are trying to sell it.”

Eric R. Voth is currently a business transaction consultant and author of How to Sell Your Privately Owned Company: A Basic Guide for Independent Business Owners, Baby Boomer’s Edition, from ERV Productions Inc. For more information, visit http://howtosellyourcompany.wordpress.com/.

Publication date: 12/07/2009