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7 Steps to Prepare Your Company for an Acquisition When an entrepreneur decides it's time to sell her company, it's hard to know where to begin. Here are a few do's and don'ts to get you started.

By Panos A. Panay Edited by Dan Bova

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Opinions expressed by Entrepreneur contributors are their own.

When an entrepreneur decides it's time to sell her company, it's hard to know where to begin. With so many legal and financial steps to follow, it can be an overwhelming task to manage and follow through.

When going through the 2013 acquisition of my company, Sonicbids, I learned some important do's and don'ts that matter when going through the acquisition process.

Related: This Entrepreneur Sold His Company to AOL and Bought It Back Two Years Later. Here's What He Learned.

Here are seven steps to help prepare you for the process.

1. Be clear with yourself on goals and motivations for the sale.

The first step when considering whether to sell your company is to reflect on what you hope to gain from the sale and how you want it to be executed. Do your homework to ensure that you fully understand the impact of this acquisition beyond the dollar amount. Look at how it will affect your career, your company's brand and future. If you don't already have a prospective buyer, spend time considering what the ideal acquirer's profile would be and what corporate culture and values would be most desirable.

By setting goals and standards from the start, you will have a clear vision that will lead to the best outcome when the deal is done.

2. Get your house in order.

The acquisition process is often long and complex and even more so if the company acquiring your business is publicly traded. By doing your own due diligence ahead of the sale process, sorting through company history and financials, you are more likely to ensure the sale goes through smoothly. For example, make sure all taxes are filed, finances are in order and there are no outstanding issues that could arise and slow progress.

3. Time to involve the experts.

Having the right experts -- investment bankers, attorneys and tax advisors -- is a crucial part of preparing for an acquisition and having a successful outcome. These experts will be instrumental in helping you position the company in the most optimal way for your exit, and they have the experience you will need for something that is likely a first time event for you.

Related: Your Company Got Acquired. Now What?

4. Be open with your management team.

Your management team is one of the key factors in your company's success and an acquirer will certainly want to retain the best and the brightest in your talent pool. By creating an open environment and keeping the management team informed and involved, you will better prepare your team for the transition once the acquisition is finalized.

5. Secure alignment among key stakeholders to avoid last minute snafus.

It is important to keep your board and other key stakeholders rallied around the sale. By doing so, you create a level of transparency that will avoid last minute surprises or disagreements that can delay an acquisition or cause it to be derailed completely.

6. Secure major partnerships and clients.

Ultimately, when a company decides to acquire a business, they want to know that major customers won't jump ship after the sale. To that end, it is important that (to a select degree) clients and key partners are kept informed about what is happening. Additionally, loyal and happy clients serve as valuable references to a potential acquirer, making their support a critical part of your strategy to maintain stability throughout the process and its aftermath.

7. Know your company narrative.

Task your team of experts, as well as your marketing and public relations teams, to work with you to ensure that you have a compelling, credible story to tell post acquisition. You and your company will be in the spotlight, and it is critical to be prepared for it. Your corporate narrative will be important in inspiring confidence among employees, customers and stakeholders and in convincing them to accompany you as you embark on your new journey.

Related: Looking to Sell Your Business? Think Like a Buyer.

Panos A. Panay

Vice President for Innovation and Strategy at Berklee College of Music

Panos A. Panay is the vice president for innovation and strategy at Berklee College of Music, the Managing Director of the Berklee Institute for Creative Entrepreneurship (BerkleeICE), the co-founder of the Open Music Initiative (OMI) and a passionate entrepreneur, educator and startup mentor.

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