From: http://www.bizjournals.com/

Are you asking yourself, “Is this the year I sell my company?”

If you bump into a business broker or M&A professional, you might ask him or her things like, “How is the market these days?” or “Is this a good time to put my business up for sale?”

While these questions can lead to fun and interesting conversations over coffee, they are only the tip of the iceberg when it comes to determining the best time to sell your business.

Let’s take a few minutes to address the current market conditions and touch on the key factors you need to get in line if this is the year you plan to put your business on the market.

Will 2016 be a good year to sell?

Let’s get this one out of the way first. It will be a seller’s market this year. We still haven’t seen the predicted wave of baby boomers selling their businesses, so there is still strong demand for quality, profitable businesses when they come up for sale. In general, sale prices are high, and 2016 should be a good year to sell.

However, market factors are only the beginning. Internal factors will have more influence on whether or not now is the right time for you to sell. Here are a few important questions to ask yourself.

Are you ready?

Can you picture your life without your business? What are you going to do with your time? The reality of business valuation is that if you continue to run your company for approximately three more years, you will earn close to the full sale price that anyone would pay today. If your response to that is, “That’s crazy, why wouldn’t I just work for three more years?” then that’s a pretty good indicator that you aren’t quite ready to move on.

Are your financials well-positioned and showing profit?

If you have decided you are mentally and emotionally ready, the next item to consider is the state of your company from a financial perspective. First, are you profitable? Buyers want to purchase a company that will return their investment. The more profitable you are, the more your company is worth.

Second, do your financials show that full profitability? It’s common practice for business owners to minimize their profitability for tax planning purposes, but in the years leading up to a sale, it is good to have your profits maximized on your statements, clear as day. This will make it obvious to buyers why they should pay a premium for your business. Also, make sure those financial statements are clean and organized.

Is your house in order?

Lastly, make sure your business is ready to hand over to a new owner. Do you have your processes well documented? Is your operation well organized? The quicker a buyer can understand your operation and picture himself in the corner office, the more confident they will be in buying the company and paying top dollar.

If you think 2016 might be the year to sell your company, don’t simply look at the outside climate, but take a deep look at the internal climate as well. Contact a local business broker or M&A professional to help you analyze your business, determine the value, and identify those areas you need to address to strongly position your business and personal life for a successful sale and transition.