Today I wanted to share with you what I see as the most important question you can ask yourself in order to prepare to sell your business for top dollar someday.

Here is that question: "What can I do today to prepare to sell my business two to three years from now?"

Here are three concrete steps to follow TODAY as you prepare now to sell later.

Step 1: Determine what your business is currently worth.

How do you find out what your business is currently worth?

You can look to industry or association sources for the most common valuation methods for your type of business. You can hire a valuation firm, work with an investment banker, or even hire a CPA experienced in your industry and type of business.

Even more important is understanding how companies in your industry and business category are valued by the market.

What formula is most commonly used? Is the value for your type of business commonly a net multiple of its "operating profits"? Or of its "EBITD"? Or some other formula?

What is the current range of business multipliers that are commonly used, and how can you command the top end of that range?

This is a huge leverage point so find out now. PLUS, the reason why buyers see these formulas as reliable indicators of value is because they've learned over the years that they actually are predictive of a business's value in that industry. Hence, building your business over the long term to maximize a formula can often help you build a better business to OWN!

Step 2: Do a "buyer's audit."

Put yourself in the shoes of a potential buyer and take a hard, long look at your business. Which elements give it value in an outsider's eyes?

What major risks do you see that scare you? What are the most attractive parts of buying this specific business versus one of its competitors? What are the least attractive parts of buying it?

If you could change only three things to make it more attractive as an acquisition, what three specific things would you change over the coming 12 months?

Step 3: Mitigate risks and enhance value.

Once you've identified key risks (see the following Six Key Risks) and specific elements that create value, take preemptive action to lessen the buyer's risks and enhance your business's value.

The more you mitigate risks and enhance value in the eyes of a future buyer, the more your company will be worth when you sell it.

I hope I stretched your thinking today.