Original Article from Forbes.com

So how do you know when it’s time to consider putting up the “for sale” sign? In my experience, you can only start the selling process when your company is doing well. You need double-digit growth, solid revenue, good net earnings and a great management team who is willing to stay and expand the business post-merger.

Let’s say the timing is right. You’ve got your company in order and are generating solid revenue. What next? There are three key steps to getting started.

First, develop a new business plan so you can tell the growth story of your business to a potential buyer. When you are finally at the negotiating table, the price for your company will include intellectual property, strength of team, revenue and net earnings considerations, as well as potential future value created post-merger. The revenue and the net earnings are your past performance and come directly from your financials. The “potential future value” is what you can convince the buyer they will gain based on your new business plan. So it is critically important to do this right and be believable.

Next, you have to have someone to manage the process both internally and externally. This is the quarterback to manage the stakeholders. I think the best person for the job is the CEO, but he/she has to delegate day-to-day responsibilities in order to properly champion the process.

Finally, bring on an experienced investment banker who will represent you and bring all parties involved to the table. This is a very important step and the role of your banker depends on the size of the deal. Deals between mid-sized and large companies (particularly public companies) are usually represented by a large investment bank, such as Goldman Sachs or Morgan Stanley. Smaller deals and private companies are trickier. They require hand-holding and thinking outside of the box. Boutique firms specializing in a region or market segment are best for these.

You should also consider bringing on a CEO personal strategic advisor. This could be your banker, one of your board members or even a close friend. This person has to be someone who you can trust and have faith in. They will need to be able to go through the details of a deal, discuss pros/cons associated with every step, and develop a plan for each turn.

Years ago when I started the process of selling Movaz Networks, I reached out to a firm that I knew well, Bowen Advisors. Paul Bowen, the firm’s founder and president, was instrumental in bringing all of the parties together. He became my personal strategic advisor and planned the process. Eighteen months and three attempts (two failed) later, we signed a deal.

For those of you thinking about selling, your company will fall into one of three categories of mergers and acquisitions (M&A): public/public, public/private (startups), or private/private. The category will affect your strategy, but shouldn’t impact your likelihood of success.

Take Twitter for example. The company has been on the market for more than a year, but has not been able to close a deal. Though a big company with a highly valued product, many people believe the company lacks strategic focus and the ability to do a deal.

On the flip-side, is Facebook’s acquisition of Instagram and WhatsApp, or Google’s acquisition of Android and DoubleClick. At the time, these acquisitions were based on potential future values, and they were proved to be right. The incremental values of these deals post merger have been significant.

I’ve seen every type of deal. Those that were wildly successful and those that failed after the merger. I also remember deals that never happened. A couple years ago one startup turned down a $500M buyout deal – only to go bankrupt nine months later.

At the end of the day, you need to get your timing right and your advisor should be helping you get there. You will have to work hard and search for a buyer. Most deals are sold rather than bought. You also need to know when to say yes and when to say no. Your window of opportunity for selling will be very short. Be smart. Be decisive. If you play your cards right, you might have the next company making headlines after securing a mega deal.