Do I need to pick a successor before I can seriously consider selling to a third party?

No, and waiting to "settle" succession before exploring a third-party sale often just delays a decision that doesn't need to be sequential. You can seriously explore a sale to an outside buyer while a succession question remains genuinely open — the two aren't mutually exclusive processes, and information from one often helps the other, since knowing what a third-party sale could realistically achieve helps you judge whether an internal successor's terms are actually fair by comparison.

The nuance is being clear with anyone you're talking to about where things stand. If a family member or employee believes they're the presumed successor while you're also quietly talking to outside buyers, that can create real relationship damage if they find out later, even if you never promised them anything formally. Managing that expectation honestly matters as much as the legal side of either path.

If no internal successor has stepped forward, or the ones who have don't seem ready, that's often exactly the situation where seriously exploring a third-party sale makes the most sense — not as a fallback, but as a legitimate parallel option. A business lawyer can help you keep both conversations moving without one undermining the other.