I went for my first run of 2024 on Melkbosstrand Beach on New Year’s Day. The 1st of January is a special day in my training calendar as it indicates the ramp-up for the Comrades. It also marks the day that I need to start getting serious about my training to qualify for and run my best Comrades.
Similarities Between Running An Ultramarathon And Selling Your Business:
- Careful planning and consistent training are essential to run a good ultramarathon, the same is crucial in preparing for a business sale.
- No matter how well you are trained, it is going to be tough. Just like in a successful business sale, you might doubt that you can finish on target but you have to trust the training, stick to the plan and soldier through.
Whether you are a business owner looking to retire, move on to new ventures, or simply cash in on your hard work. Here are some fun parallels that show the key factors you need to consider when selling your business:
- Use A Coach, Appoint A Trusted Advisor
I recently appointed a Comrades gold-medalist winner as my coach and this has made a massive difference in my running. He knows what training is needed and sets up programs that I can follow to reach the agreed-upon objective. He assesses my performance and adjusts when needed and is always there to provide sound advice.
When selling your business this is the role that the sell-side advisor plays. Proper preparation of yourself and your business, combined with running a solid sales process, can increase the value of your exit by at least 20%.
- Set Your Pace, Know Your Business’s Worth
Many runners use calculators to predict race times based on past performances. I am amazed at how many times I have started the race, and somehow fooled myself into believing I would exceed the race calculator’s prediction. I would set off at a pace exceeding my level of training and then be surprised when I hit the wall at 45 km and would have to limp the last 45 km to reach the end.
When it comes to selling your business, you must be realistic when setting your sale price. It is worth it to get an independent assessment of your business’s market value to see if there is a gap between the estimated market value, and the price you need– what I like to call an ‘expectation gap’. If there is a gap then you have two options, either improve the value of your business before selling or drop your expectations. These decisions need to be made before starting the sale process to avoid hitting the wall, which is inevitable if there are no buyers at your price.
- Consistent Training, Consistent Preparation
Preparing to sell a business is a marathon effort. Like running, you can’t cram your training in at the last minute and expect success. Take the time to make sure both you and your business are ready for sale by finding out if there is an expectation gap and dealing with it before entering the sale process.
Some areas of focus that spring to mind to ensure that your business is up to standard during the due diligence phase (DD) are:
- making sure that your financials are accurate and up to date.
- that you can explain your financial story and that it is a story that supports a premium price.
- auditing your financials before going into DD and making sure that all agreements with key stakeholders are up to date, signed and available.
- that your business can stand on its own, independent from you.
4. Stick To The Plan And Take Advantage Of Any Support Offered
No matter how well-trained you are, you will have to dig deep to get through the many issues that can arise during a race. You will go through periods of euphoria and moments of depression. At these moments, you need to stick to the plan, trust the training and connect with the runners around you to build the courage to keep going.
In the same way, no matter how well the business was prepared for sale, the process is going to require a mammoth investment of time and lots of courage. It will be an emotional rollercoaster where you wonder whether the business is even sellable. Sometimes there will be a high level of interest shown and other times when it seems no one is interested or willing to move forward at pace. It is at these moments that you need to stick to the sales plan, keep going as things change, trust in your business, and take advantage of your sell-side advisor to help carry the emotional workload and to keep you motivated.
Running a marathon and selling a business are journeys of discipline, strategic planning, and tenacity. Both require a vision that appreciates sustained effort over time, not quick fixes or rushed preparations.
Whether facing the physical demands of a marathon or the complexities of a business sale, the key is consistent, well-planned preparation and never moving.
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