Selling your business is in some respects like selling your home: To make the most advantageous deal, you have to thoroughly "clean house" and take pains to highlight the best attributes of your product.

Many entrepreneurs will already have a leg up on this process because most of the information needed for the early planning stages will have already been gathered for financing and other negotiations. But the business owner should also seriously consider the following steps:- Stick with your decision to sell. The time and cost required to market and sell a company are substantial. Changing your mind in midstream would be expensive to you and to any prospective buyer.

- Determine your future involvement in the company. If you do not intend to be involved after the sale, it may be necessary to identify a second-in-command who can oversee the process and who might also assume your responsibilities under the new man-age-ment.

- Structure the transition. As the seller, it is more advantageous for you to sell the stock of the company rather than its assets. This provides a clean break from the obligations of the company and carries greater tax benefits. If you want to retain certain assets or lease them to the new owners, these assets can be spun off. Remember: A restructured sale of a spin-off requires a timely decision to allow for proper consideration of regulatory and tax implications.

- Prepare a business plan. As a majority of purchase transactions are accomplished through leveraging, it is essential to demonstrate the company's viability through a detailed, realistic business plan. The plan should include the reasons for the sale; an analysis of the company's market position; the company's tax perspective; and financial forecasts for at least five years, reflecting the results of operations, financial position and cash flow.

- Assess the risk areas. Risk areas may include aggressive policies of the company that may be inappropriate for the new owners, or areas in which your company previously may not have complied with accounting standards. Such areas may have been immaterial to your financial position but could delay negotiations with a prospective buyer. Once problems have been identified, they should be corrected promptly.

- Verify completeness of legal documents. You can expect the buyer's legal counsel and financial advisers to make an extensive review. To facilitate this process, verify that your files contain all legal contracts, agreements, minutes and stock records. Identify any unwritten agreements that could present a potential liability to the buyer. The objective here is to ease negotiations and prevent any future disputes.

- Keep business modifications to a minimum. In preparing their companies for sale, entrepreneurs are occasionally tempted to cut discretionary costs such as advertising, research and development and other overhead to help pump up the company's earnings and evaluation. This is generally unwise, as the potential buyer's analysis will often detect these discretionary changes. The company's valuation may thus be adversely affected and, if the sale is not completed, the cuts might hinder future operations of the business.

- Establish a value. Based on the business plan and facts discovered in the planning process, value your company. Valuation techniques are complex, especially in regard to tax implications, and expert professional advice is recommended. Once the value has been established and documented, make sure you are satisfied with the result and stick to it.

This eight-step process can be time-consuming but such an organized approach can result in a smooth transition, as higher return and the avoidance of costly future litigation. A change in ownership is a critically important juncture for the entrepreneur and the company. It is essential that the business owner consult with objective advisers throughout this complex process; their considered views can be invaluable.

Scott Pickett is with emerging business services, Coopers & Lybrand.