Jeffrey Cornwall has another great link today. Alan J. Smith offers a hands-on guide if you are about to plan an exit.

"A proper valuation -- a determination of the company's worth on the market -- prepared by a valuation professional working with the firm's CPA or CFO is the mandatory next step. The valuation serves more than one purpose. It defines and supports a range of value for the company and also explains what went into the analysis and how the conclusions were made. Finally, it identifies the factors that influence and enhance what the company is worth."

"An obvious concern is how to properly price a company in the marketplace. Owners can always specify an asking price, but rest assured that if they do, the price will only go down from there. Our solution at Bay Pacific Group is always to go to market without a defined price, allowing buyers to set terms and positioning the company for offers that exceed its expectations. Consider the case of a Canadian company that, internally, expected to be sold for $6 million. The company received an $8 million offer, which was eventually raised to $11 million, because the buyer believed its manufacturing process would significantly reduce the time required by its own."