I've owned, improved, and sold hundreds of businesses successfully. Here are the 6 areas you should be focusing on if you want to sell your business at its maximum value.

• Michelle Seiler Tucker is the founder and CEO of Seiler Tucker Incorporated, where she sells, owns, and improves various businesses.
  
• The following is an excerpt from her book, "EXIT RICH: The 6 P Method to Sell Your Business for Huge Profit."
• In it, she shows small business owners and entrepreneurs how to effectively use the 6 Ps — people, product, process, proprietary, patrons, and profits — to evaluate and sell their business for maximum profit.
• If you want to scale and prepare your business for a successful exit, Seiler Tucker lays out immediate steps you can take now, even during a recession.

Based on years of experience, Seiler Tucker has worked with all levels of businesses. We have learned that buyers will pay top dollar for businesses that operate on all six cylinders, or 6 Ps. We have sold businesses that are barely hanging on. Even though you think your business doesn't have value, someone else may find value in it; as the old saying goes, "someone's junk is another man's treasure."

We have sold businesses that have been around for decades, making huge profits. We have helped sellers through divorces, relocations, burnout, and bankruptcies, and we have helped sellers on their deathbeds. We have also worked with all types of buyers, from all walks of life. Because of this vast experience, we know what will sell, what won't sell, and most importantly, how to maximize our client's value.

It's imperative that you identify who your buyer will be and know their buying criteria. It's also imperative to know the different types of buyers. Most buyers look at a multitude of characteristics of the business they are interested in. Some buyers will purchase the business even if it does not function on all six cylinders, and others will not.

The 6 Ps are the most important factors to consider when evaluating and preparing your business for sale. If your business is deficient in one or more of these areas, it's not functioning at full value and won't get its maximum price at sale. In the engine of your business, the 6 Ps are the cylinders, because they drive value. Many businesses don't operate on all cylinders. Instead, they're sluggish, they waste fuel, and they break down. You can avoid this inefficiency by tuning up your business using the 6 P Method. If you follow this method, it'll take you wherever you want to go.

Following are the 6 Ps that are needed to drive value to your business.

Buyers will pay top dollar for businesses that operate on the 6 Ps:

People: Do you have the right people working in your business?

Buyers are looking for a business, not a job. They don't want to buy your company and immediately have to start running it. For a buyer to consider a business to be sustainable, it must have the right people in place so they do not have to invest time and money into hiring and training employees to run their new company.

Product: Does your product have a niche?

Consider, for a moment, Blockbuster Video, which had a great product in its heyday but ran into the problem all companies face when they don't continually innovate and market: They die a slow death from consumers. Blockbuster watched Netflix become more powerful but did nothing to remain competitive. As a result, they became obsolete.

It's important to ask yourself if your industry or product is on the way up or on the way out. If it's on the way out, that doesn't mean you sell your company to some uneducated buyer; you innovate and market to make your business relevant and keep yourself out of bankruptcy. No buyer will buy a company that will be out of business in a couple of years, so make sure your company has a niche with staying power.

Process: Are your business processes efficient and productive?

Most people don't think about processes when selling a business, but processes are essential to a business and to building profits. A great product can't save a company that doesn't have systems to market that product, collect payments due, or schedule meetings with clients. Does your company constantly reinvent the wheel instead of having a standard system for running the day-to-day and long-term operations? Buyers want to know that the engine under the hood of your company runs efficiently and isn't held together with twine and baling wire.

Proprietary: Do you have intellectual property?

Anything that makes your company special or unique, such as patents, trademarks, and contracts in place, is proprietary and drives up the value of your business. You could even have proprietary assets you haven't thought of, like customer databases, which are often overlooked and undervalued. In 2014, the instant messaging service WhatsApp had over a billion users. Facebook paid $19 billion for it, because its database could be monetized. Buyers are looking for the edge, or competitive advantage, that sets your business apart from your competition or provides an opportunity to exploit.

Patrons: Is your client base diversified, or do you have customer concentration?

A sustainable business is nimble and can pivot when necessary. A varied and diverse client base makes this possible. The 80/20 rule says that 80% of your revenue comes from just 20% of your clients. If that 20% all comes from the same sector and something happens to that sector, 80% of your revenue is at stake. You can always lose a single client and recover, but if most of your revenue depends on a single client or single category, you're tying your fortunes to the behavior of that industry, so make sure you have a diverse client base.

Profits: Is money flowing in and out of the business so it maximizes profits?

If you're upside down in assets and inventory and your cash flow isn't providing the money you need to live on, you're not profitable. Why would a buyer be interested in a company that doesn't make money? Most buyers are not interested in buying a nonprofit. The only buyers interested in buying an unprofitable business are turnaround specialists and perhaps competitors or strategic buyers, especially if they can find a way to monetize any of the 6 Ps. We have hundreds or thousands of buyers for highly profitable businesses. The higher the profits, the higher the multiple.

The one P that buyers will not pay for is potential. Many owners with struggling businesses say their company has potential. While buyers want a company with growth potential, they're not going to pay a premium for it, because they'll have to invest the time and money to possibly realize it.

Ask yourself how many Ps are strong in your business and how many you still need to strengthen. Be honest. We find that many companies operate on typically two to three of the 6 Ps. Few operate or continue to operate on all six. And even if they do operate on all six, it's not always the case; many things can happen to cause a business to lose footing from time to time and slip.

Excerpt from "EXIT RICH: The 6 P Method to Sell Your Business for Huge Profit" (January 26, 2021; Fast Company Press) provided with permission by authors, Michelle Seiler-Tucker and Sharon Lechter.

Michelle Seiler Tucker is the author of EXIT RICH: The 6 P Method to Sell Your Business for Huge Profit and the founder and CEO of Seiler Tucker Incorporated. She has sold hundreds of businesses to date and currently owns and operates several successful businesses. She is a leading authority on buying, selling, and improving businesses, as well as increasing business revenue streams. She has appeared in Forbes, Inc., CNBC, and Fox Business. She has also been a "celebrity judge" on "Pitch Tank" alongside Steve Forbes and Whole Foods CEO John Mackey. She lives in New Orleans.