Owners of growing companies typically have two paths to liquidity – either offering shares to the public through an IPO (initial public offering) or a sale of the company. Since an IPO is highly unlikely in today’s business environment, entrepreneurs should begin positioning their companies for sale early in the life of their businesses and should continue to take steps toward that strategy throughout their businesses’ life.

What’s at stake, after all, is more than just the sale itself, but also enough money to enable the serially inclined among this entrepreneurial group to continue to build companies and others perhaps to pursue growth of another sort – by taking on post-entrepreneurial interests that for years have been on the back burner.

There are many clichés about preparing your business for sale, such as “paint the house” (e.g. dress up your business for sale to make it appear as attractive as possible for the buyer). While an unsophisticated buyer may be impressed by shallow efforts, most buyers – especially in today’s environment – will focus on substance over form. As a result, it’s in your best interest as an owner to make deep, permanent efforts to improve the positioning of your company for a sale. Following are eight suggestions for how to do this.

Build a great company: Above all else, put all your efforts behind building a great company, one with an industry-leading product or service. There is no better way to extract the maximum value from a seller for your business than to have a superb company. Don’t ever lose sight of this – it’s a simple idea that is overlooked surprisingly often.

• Recruit experience: Most acquirers have much more experience buying businesses than owners have selling businesses. Don’t be a rookie – surround yourself with experienced people who can help. Start with a strong lawyer who has plenty of transactional experience. Bring on board members or advisors who know your industry, know the potential acquirers, and understand how to do transactions. Hunt down people who have sold businesses in your industry in the past and ask them for advice. However, be thoughtful about the kind of help you recruit – make sure it’s actually additive to your efforts. For example, hiring “a broker” may not actually be the type of help and experience you need, as many buyers will be uninterested in negotiating with a broker and the broker’s only incentive will be to get a transaction done, not necessarily maximize the value to you for your business.
• Put yourself in the buyer’s shoes: This is especially important if you are selling a business for the first time. Think about what your potential buyer wants from your business. If you were that buyer, what would you be looking for?
• Know your buyers: Every business has multiple potential buyers. However, it’s often the case that a business owner falls in love with the first buyer that makes a pass. If you know the potential buyers for your business, you’ll be able to quickly react when you are approached. Optimally, you’ll have a personal relationship with the owners and management of your potential buyers and will be able to reach out to them to see if they have any interest in discussing an acquisition when other buyers approach you.
• Continually position your business in its current competitive context: If none of your competitors know about you, it’s difficult to create a competitive situation if you are approached about an acquisition. In contrast, if you are well known as a leader in your industry, once it is known that a buyer has approached you, you will be in a good position to generate additional interest in your company.
• Know what you want to do: When you find yourself in a position in which you can potentially sell your business, know what you want. Most business owners haven’t put a lot of time into thinking what they want to get out of a sale. The financial aspects of a deal are merely a small part of the overall transaction – don’t overlook the emotional, organizational, and functional aspects. When approached by a seller, don’t vacillate – be clear about what you want and negotiate hard for it. If you don’t know what you want, it’s likely that a sophisticated seller will be able to sense this and take advantage of the situation.
• Be clear and honest with your team: You need to carefully choose the right time to tell your team about the potential sale. However, once you tell them, make sure you are honest, clear, and consistent with your message. Assume everyone will know everything about the deal – even small “falsehoods” or “omissions” can come back to haunt you. This doesn’t mean you have to tell every person in the company every detail – decide what you are going to share and then be consistent.
• Don’t be a seller, but always be prepared to sell your company: Always be ready to be approached. If you can’t answer the question, “What do you want for your company,” spend some time thinking about it.

As a business owner, you will find that the question, “What do you want for your company?” segues seamlessly into, “What you want for yourself?” with the latter being the critical question. When it comes to pursuing the sale of a company you founded and spent years building, you’re talking about more than growing a business. You’re talking about growing a life.