Selling a design or construction firm is very similar to selling a piece of real estate. If the product (company) is attractive to prospective buyers, it will likely command a higher price than an ugly duckling covered with warts. Preparation for a firm sale can help firm owners get a better price in a firm sale or merger . Here are four things that should be done at this stage.

Office

Show me an office that looks like a scene from the Brady Bunch and I'll show you a firm that will probably have trouble getting interest from buyers. Outdated offices create the perception that the company is poorly run. Get a fresh coat of paint on the walls. Clean the carpets and the interiors. Getting the offices updated also helps to improve employee morale and can be beneficial for recruiting new talent into the firm.

Receivables.

Old invoices create the impression that a firm is poorly managed. It may also mean that a firm is setting itself up for cash flow issues down the road. Make sure you have good collection systems in place and write off the invoices that are unlikely to be paid.

Debts

Getting debt off the books before putting a firm on the market is a good practice because firms with low debt to equity ratios are much more attractive to buyers than firms with high debt to equity ratios.

Firm Profile and Web Site

When was the last time the firm profile or web site was updated? I've seen a lot of good firms with terrible web sites and it reflects poorly on the firm. It's an easy thing to fix and getting these housekeeping items done before putting the firm on the market will attract more potential buyers.

Transition plan after the sale

Buyers of A/E/C firms typically look for offices with existing client relationships and/or a service offering they may not have. Because of this, many buyers will expect sellers to stay with the firm for a period of time after the transaction to prevent the loss of clients and employees. Sellers that understand this expectation and are prepared for this issue in the negotiation stage will fare better then those who don't.