There are three crucial questions business owners need to ask themselves when preparing to sell:

1. What is the lowest acceptable price based on net after-tax and closing costs?
2. What are the most lenient terms I am willing to offer as the seller?
3. What will the severance packages be for key employees?

Once owners have decided on these items, they should have a dress rehearsal with their advisors regarding negotiation strategy and tactics.  Owners should decide which person among the seller's group will be the lead negotiator, how to rationalize the higher price, and what items are not negotiable.  Negotiations require various skills including careful listening, knowing when to caucus separately with the team, knowing how to make concessions slowly, and when to counter with requests.  Above all, the seller must predetermine the bottom price and the most lenient terms before the negotiations begin.

When Senator Ted Kennedy ran for president of the United States, he was being interviewed on national television by David Frost. Frost asked Kennedy, "Why do you want to become president of the United States?"  Kennedy stuttered and stammered his way through the response in a very unconvincing way.  His response was so lackluster that the campaign virtually ended there.  The moral of this story? A seller should be prepared to answer such critical questions, as:

• Why do you want to sell the business?
• How would a new owner grow the business?
• What is the company's competitive advantage?

Selling your business is in many ways you, as the owner, selling yourself.  An owner can't be overly anxious and should be able to articulate how the acquirer can grow the company. 

The owner should be able to paint a bright picture of the company's future, but in doing so, also be careful not to dominate the conversation.  Anticipate the questions that will be asked by the acquirers, particularly the critical questions.