Thinking about cashing out? If you're gearing up to sell your business in the next year or so, you may be disappointed. Not only are valuations on many businesses still depressed, but it's probably too late to do much to spruce up the company.

However, if you can cool your heels for two years or longer, many experts say, your chances of negotiating an attractive sale can increase dramatically, particularly if you begin preparing now. "It's very important to start thinking about your business the way outsiders would," says Sam Starr, a partner with Coopers & Lybrand's national tax office, in Washington, D.C. Here are some areas Starr and others suggest deserve close attention:

Professionalizing financial management. Buyers will want to gauge your company's ability to generate profits. If you're used to paying for perks (like club memberships) out of company coffers, it may not be easy to persuade buyers that your adjusted profit numbers are credible. At the least, document everything, says Ira Bennett, owner of Bennett & Co., a merger firm in Andover, Mass. "Keep a list of things you do that the new owner wouldn't need to do."

Tightening operations. If you can boost profits by reorganizing the way the business is run, do it, but don't expect buyers to pay for improvements you haven't yet implemented. However, beware of achieving gains through deep cuts in areas like research and development and maintenance, says Robert L. Kuhn, president of the Geneva Cos., in Irvine, Calif. "Buyers will be suspicious -- they want assurances of a company's future well-being."

Settling business conflicts. Potential buyers are rightfully uneasy about pending litigation. Depending on the nature of the lawsuit (environmental claims are especially pernicious), unresolved disputes that could result in big penalties or settlements can kill deals -- or at least force sellers to set up contingency funds. The best policy: clean the docket before talking to prospective buyers.

Bolstering management. As you near the point of selling, having other managers with important roles -- even if you have to recruit them -- can make the business a lot more valuable, says Starr of Coopers. "Unless you're planning to stick around," he explains, "you want to show that the business can be run without you." -- Bruce G. Posner