2009 has been an unprecedented year, and many small to medium sized companies and their management teams consider themselves fortunate to have survived the worst recession in 50 years. As strategic planning for 2010 continues, business owners thinking about an exit or major transaction in 2010 should keep the following considerations in mind.

1. Begin Housekeeping Now. Every sale, capital raise or financing starts with due diligence. That means your corporate books and records and significant contracts must be well organized and in good order. Also, consider necessary changes to important contracts, leases or customer agreements. Better to negotiate those now, instead of during the compressed time of a contemplated sale.

2. Start the Process Now. Many business owners make the mistake of reacting to an unsolicited offer from an interested party or talking to only one potential buyer or investor at a time. Due diligence commences, negotiations quickly follow and the owner finds himself confronting the difficult choice of maintaining the status quo or doing a deal with a particular buyer. Remember: terms, conditions and valuations improve in if there are mulitple buyers or investors involved in a competitive process.  This puts you in charge with multiple buyers or investors bidding against one another. You should consider how to create such a process or meet with experienced M&A advisors who know how to make that happen.

3. Be Prepared to Go It Alone. Projections for 2010 should include a go-it-alone strategy, with realistic plans for cash flow, including any necessary equity or debt infusions. Hope for a white knight in the form of a buyer, investor or lender is not a substitute for a real-time financing and operating strategy. In all likelihood, finding and negotiating the right transaction will take 6 months or more.  You will be in a position of negotiating strength if you

4. Check Your Assumptions. If your company needs a capital infusion, identify the amount you need and the right "audience" to approach. Typically, a round of less than $1 million means that family, friends and neighbors are your best bet. For a equity or debt investments of up to $5 million, you should target angel investors, venture capital groups, and possibly smaller private equity groups interested in your market sector. Terms for those transactions vary widely, and you will need to pay attention to investor expectations, especially regarding the timing or payments and their expected return on investment.

5. Think About Structure. Begin talking with an investment banker or business broker about how deals are being structured in today's market.  You should also talk with your lawyer or accountant about things you can do now to minimize or eliminate capital gains taxes that might result from a transaction.  The proposed changes to the tax code could result in a significant increase in your tax liability, so thoughtful planning now could yield significant benefits next year. Also, if you are not familiar with earnout structures, which provide for contingent purchase price payments over time, you should talk with your M&A advisor  to understand your options.

Most M&A advisors expect an uptick in M&A and corporate finance activity in 2010. A proactive approach will help you best position your company for what lies ahead.