On the income statement, eliminate or clearly isolate non-business expenses, and limit non-deductible expenses to the greatest extent possible. Potential acquirers know that your actual financial results will be adjusted for these items to derive the earnings that will be the foundation of your valuation. Isolate and define non-recurring post-transaction expenses, such as legal or other advisory fees related to the transaction. This will produce your truest income statement, which should increase your firm's valuation in the sale.

Remember to also get all of your corporate records, minute books, stock certificates, certificates of authority, licenses, permits and related documents in order. Have your legal counsel investigate whether there are any inaccurate open liens, UCC filings or similar items. Nothing is worse than a mad scramble the day before the closing to sort out these sometimes complicated matters. In addition to the stress, that mad dash to the finish line can rack up some costly legal fees and related expenses.

A couple of additional items that you could and probably should focus on before selling include:

• Consolidating your Property & Casualty markets to achieve efficiencies and to maximize contingent-bonus commissions and other opportunities.

• Moving small and commodity business to insurance company service centers to achieve additional efficiencies.

Regardless of where you are in the M&A cycle — two or 10 years out from selling your business — these recommendations are solid operating procedures.

An agency owner always should follow a couple principles. First, always run and manage the agency as a business and not as an extension of lifestyle. Second, run and manage the agency to position it for maximum valuation as if you need to sell it tomorrow.

Tim Cunningham, is a founding principal of Optis Partners, a Chicago-based specialty investment banking consulting firm.