What will you leave on the table when you leave your business?

Too much.

That is, if you’re like most people who sell their businesses. For the sad fact is that most businesses are sold for a fraction of their worth. And that means leaving money – hard-earned money – on the table when their owners sell.

It isn’t that these business owners are dumb. After all, they didn’t build their businesses by being stupid. Nor is it because sellers routinely get cheated. Buyers will take any advantage that comes their way, of course, but they’re usually not dishonest. No, most businesses sell for less than they’re worth because of one simple reason: They haven’t been prepared for sale.

After all, if you wanted to sell your house, wouldn’t you spend a little time doing some painting…having the carpets cleaned … and fixing that broken shutter before you planted a “For Sale” sign on your front lawn? It’s the same with selling a business. Unfortunately, studies have shown that most owners will spend more time planning a family vacation to Disneyland that they will on a plan to sell their business.

What is it that makes business owners so averse to that kind of planning?

The experts say it’s all in the owner’s head. In other words, it’s a certain way of thinking – a mindset, if you will – that gets in the way of planning and, consequently, a profitable sale.  Entrepreneur-turned-author-and-consultant Gower Idrees calls it the “entrepreneur mindset.” As Idrees explains in his book, The Exit Bomb, the same qualities that make entrepreneurs successful are the same ones that can prevent a successful sale.

For example, entrepreneurs – and by extension virtually anyone who’s built a business – are, almost by definition, risk-takers. So they’re oblivious to the inherent risks built into their businesses. But most buyers are risk-adverse. Risk is the last thing a buyer wants. For another, entrepreneurs feel they have to be involved in every aspect of the business. Nothing important can happen without them. After all, they built the business – who else could run it like them?

The downside of that is that by making the business totally dependent on the entrepreneur, he or she has become indispensable. Unless the entrepreneur is included as part of the deal — and likely that’s the last thing most entrepreneurs  want — the buyer is going to walk away. That explains why 80% of all businesses listed for sale don’t get sold. They’re unsalable because buyers don’t want a business that can’t operate without its owner.

And for still another, most entrepreneurs are lousy planners. But how else could it be? Running a business takes up every minute of the day. Who’s got time for long-term planning – especially planning for an eventual sale?

Worse still, nine out of ten business owners have no idea what their business is worth. There’s no way they can know if they’re asking for too much or selling for too little. So what can a business owner do if he or she doesn’t want to leave money on the table?

Plenty. And the time to start is now. Even if you’re not planning to sell for years.

Get some help

First of all, get some help. If at all possible, create a team that includes a business consultant, an accountant, an attorney, and a financial advisor. Make sure your business consultant is the best you can get. Work with him or her to fix what’s wrong, wring out as much risk as possible, and grow your business for the highest valuation. The higher the valuation of your business, obviously, the more it’s worth to a potential buyer.

Your team will help you prepare for the buyer’s due diligence. You need to be as transparent as possible and be able to provide quality information to the buyer. If you think you can hide your company’s problems behind a curtain, you’ve got another think coming.

If you’re like most business owners, the business is subsidizing your lifestyle. Everything comes out of the business and, naturally, you deduct everything possible as a business expense.  The problem with that is that it lowers your profits and profits are how most buyers will value your business. And because most of your net worth is likely tied up in your business, you’ll need to plan on selling for enough to create a stream of income that will allow you to maintain your and your family’s standard of living. Your financial advisor will be indispensable here.

Finally, you’ll need to understand the tax consequences of a sale. That huge windfall from the sale of your business could create equally huge tax problems unless you’re prepared. Your financial advisor and accountant are critical to helping you get that under control.

Start by talking things over with your financial advisor. He or she can help you organize your team, plan for the tax consequences of a sale, and help you make sure you’re on solid financial footing for the next stage of your life. And if your advisor has created a business from the ground up and sold it successfully, you’re ahead of the game.

Remember, it’s never too soon to start planning to leave your business. With the right planning, you’ll be able to leave without leaving a big chunk of your life’s work on the table.