Every business owner should have his or her business valued by a qualified professional such as a business broker or appraiser at least once every five years and when business circumstances change significantly. This will provide the business owner with a greater understanding of the company's value over time as well as considerably aid the company during critical times, such as the death of an owner, litigation, merger or acquisition, and the like.
When contemplating selling a business, a BOV (Broker Opinion of Value) or appraisal should be done as early as possible, preferably three years or more before the contemplated sale time. This will be helpful in planning the timing of the sale as well as in identifying strengths and weaknesses so you can capitalize on those strengths and cure the weaknesses.
To maximize the sale price, it is desirable to forecast revenues and expenses out at least a year and have a record of how accurate the forecasts were. Buyers like dependability and transparency so it is important to have the books and records in tip-top shape. In addition, you should minimize the personal expenses going through the company's books, take family members off the payroll and sell any assets that could be considered non-operating or excessive.