With the New Year upon us, everyone is making personal resolutions: to exercise more, to eat healthier, or perhaps to improve personal finances. While you are at it, why not consider making some New Year’s resolutions for running your company?

Here are six ideas to help kick start your goal-setting for the year ahead:

Resolution #1: Prepare your Company for an Eventual Sale
Whether you are planning to sell your company now or in the future, it is never too early to start preparations to increase the sale value and attractiveness of the company to buyer candidates. Advanced planning reduces the stress of preparation immediately prior to a transaction. It can also result in a more favorable outcome i.e., a higher sale value and a greater likelihood of a successful closing.

Preparations such as accounting and tax planning, preparing annual budgets and 3-to-5-year projections, and simplifying the organizational structure are all fair game

Starting the sales planning process early helps to increase the likelihood that the owner will be able to consummate a successful transaction on short notice and when the timing and the markets are favorable.

Resolution #2: Undertake Personal Financial Planning
Understanding your personal financial objectives and what it takes to achieve them is an integral part of selling a business. Specifically, it is critical to know how much money you need to realize from the sale to achieve your objectives. It is also important to conduct this analysis in advance so that you can make an informed decision prior to entering into a transaction that your objectives can/cannot be achieved rather than realize during the transaction that your objectives cannot be achieved. By undertaking personal financial planning in advance, an owner can confidently enter into a sale with the knowledge that a completed transaction will accomplish their financial objectives.

Resolution #3: Make a Great First Financial Impression
Before providing financial information to prospective buyers, confirm that they accurately represent the company’s quality of earnings” (“QOE”). For starters, confirm that the financial statements are presented on a GAAP basis or convert them to GAAP. Moreover, highlight one-time extra-ordinary items, such as unusual professional fees or non-recurring employee costs. The historical quality of earnings should be prepared for the most recent three to five years.

Further, simplify your company’s balance sheet so that the balance sheet for sale is clear to buyers. Finally, prepare a management discussion and analysis (“MD&A”) for the last three years to explain key income statement and balance sheet metrics. All of these measures help prospective buyers understand the company’s value and what is being offered for sale.

Resolution #4: Prepare Annual Budgets and Rolling Multi-Year Projections
If you have never prepared a budget and multi-year projection, learning to do so several years in advance of a sale will be helpful. Not only will you learn how to prepare these management tools before they are scrutinized by buyers, it will help formalize your expectations and goals for the business’ performance for the next year and near future. Furthermore, the ability to create a convincing and attainable budget and multi-year projection increases credibility with prospective buyers and creates confidence that the company will achieve the projected earnings and cash flow.

Resolution #5: Understand What It Takes to be a Convincing Seller
Preparing a strong answer to the question “Why are you selling your company?” prior to a sale process will convince prospective buyers that you are serious about and motivated to sell your company. Responses include personal, financial, and/or business reasons for arriving at the sale decision.

Resolution #6: Determine the Desirable Type of Buyer for the Company
Determining personal objectives will help identify the desirable type of buyer for the company. Is the sale of the company to a family member, the management team, or a private equity group that will continue the owner’s legacy the right buyer? Is a strategic buyer with a specific business rationale for acquiring the company a good fit? Perhaps a buyer with specific expertise to take the company to the next level in its lifecycle is the best option. Perhaps the objective is as a simple as identifying the buyer that offers the highest price and best terms.

If you are considering selling your company in the next three to five years, it is not too early to consider the foregoing action items so that you can obtain the best valuation for your company, achieve your business and financial objectives, and consummate a successful sale to the “right” buyer.