Similarities between running an ultra-marathon and selling your business

When 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 Comrades training calendar. It is the first day of the ramp-up in training for the Comrades and marks the day that I need to start getting serious about my training to qualify for and run my best Comrades.

I was struck by the similarities between preparing and running an Ultra Marathon and selling a business.

Firstly, just as a good strategy, careful planning and consistent training are essential to run a good Ultra Marathon, the same is crucial in preparing for a business sale.

And secondly, no matter how well you are trained, it is going to be tough. You are going to have moments when you have doubts as to whether you can finish on target. It requires that you trust the training, stick to the plan, and soldier through, which is exactly what is required to conclude a successful business sale.

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 driving home the key factors you need to consider when selling your business.

Use a coach, appoint a trusted advisor

I recently appointed a coach which has made a massive difference to my running.

He has run a gold medal on the Comrades, and he knows what training is needed to make the time on the day. He sets up a program that I can follow to reach the objective we have agreed, and 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. If you prepare yourself and your business properly and run a good sales process you should be able to add at least 20% to the value you can get from your exit.

Setting your pace, knowing Your Business’s Worth

In the same way that a runner should understand their current level of performance before setting the pace for race day, a business owner needs an objective appraisal of their business’s value before going to market.

There are many “Comrades finish time” calculators where you can feed in your best times for various distances and get a prediction of your finish time. I am amazed at how many times I started the race, and somehow fooled myself into believing I would run quicker than what the race calculator predicted. I set off at a pace exceeding my level of training and then I was surprised when I hit the wall at 45 km and had 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. But, whichever route you follow you need to make the decisions 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 at the last minute and expect success.

Before listing your business, take the time to make sure both you and your business are ready for sale.

Making sure you are ready requires finding out if there is an expectation gap and dealing with it before entering the sale process.

In terms of making sure your business focus is on whether it will pass muster when put under the microscope during the due diligence phase (DD), some areas of focus are: 

• make sure that your financials are accurate and up to date. 

• that you can explain your financial story, and that it is a good story supporting a premium price.  

• consider having your financials audited before going into DD.  

• make sure all agreements with key stakeholders are up to date, signed and available.  

• focus on making the business as independent of you as possible, to name a few. 

Again, you need to do this before you enter the sales process as it isn’t wise to train your business during the sales process.

Stick to the plan and take advantage of any support offered

No matter how well-trained you are it is going to be a difficult day on the road, you are going to have to dig deep during the race. The actual race is an emotional rollercoaster with many issues that can arise concerning nutrition, weather conditions and how you feel on the day. You will go through periods of euphoria, where the running feels great, and moments of depression when you doubt whether you will even make it to the end. At these moments, you need to stick to the plan, never stop moving as something will change, trust the training, and connect with the runners around you to build the courage to keep going.

Selling your business is the same. The sale process is going to require a mammoth investment of time and lots of courage, no matter how well the business was prepared for sale. The sale process will be an emotional rollercoaster where you wonder whether the business is even sellable. You will have moments when there is a high level of interest shown in your business and 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 sale plan, keep going as something will change, trust in your business, and take advantage of your Sell-side advisor to help carry the emotional workload and to keep motivated.

To me, 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.

Andrew Meerburg is the Head of Corporate Finance at The CFO Centre.  Andrew is passionate about helping businesses grow using Corporate Finance solutions.  His focus is on the buy and sell side advisory services, exit planning, finance raising, valuations, BEE ownership structuring and financial modelling.