I recently watched my son-in-law compete in the 2016 Olympic marathon trials in Los Angeles. Unfortunately he did not finish in the top three to make it onto the US Olympic team, but I was obviously proud to see him compete against the super-elite field of runners. After all, this was not just one race on one day for my son-in-law; this race was was the culmination of 15 years of brutal physical and mental training.
Selling a business is sort of like running in the Olympic trials. The level of preparation before the big event is extraordinary. My son-in-law had invested thousands of hours in running, exercising and good nutrition. He didn’t just wake up and decide he wanted to compete at that level. Amazingly, I see many business owners who think they can enter their “big event” with no preparation. They decide they want to sell her business before they’ve done the tedious preparation to get ready: quality financial records, diversified customer base, sustainable management team, etc. This level of preparation can’t be done on a whim, it times take, patience and commitment.
Second, while I was not surprised by the number of competitors at the Olympic marathon trials, I was surprised by the quality of competitors at the trials. By the time a runner makes it to the Olympic trials, they have to be very very good. Similarly, selling a business is done within the context of other businesses going on the market at the same time. You will always face stiff competition, usually stiffer than you think.
Third, selling a business is like running in the Olympic marathon trials because you can seldom time the event consistent with your expectations. My son-in-law knew for several months the day of the big race, but the night before he told me could have used a couple more months of training. But he didn’t control the calendar. I see many business owners who think they can control the timing of their exit, then an event intervenes to delay or accelerate their timing. Here are a couple of examples. Just last week I had a call from a guy who said he wanted to sell his business but his partner was not ready. Several months ago I got a call from a business owner asking me to sell his business. He said he had always intended to groom his son to take over the business but his son had recently been accepted into medical school and he (the owner) was having blood pressure problems so the doctor suggested he sell the business. The point being, the timing of your big event rarely follows your perfect schedule.
Finally, selling a business is like running the Olympic marathon trials because you do not control the conditions of the event. My son-in-law lives in Virginia where it hasn’t been above 80 degrees since September. It seldom gets above 70 degrees in Los Angeles during February, so there was no reason to expect race conditions to include scorching heat. However, a few days before the marathon a front passed through leaving LA in the midst of high-80s during the day. Not the weather conditions he had trained for, to be sure. This happens to business owners all the time. They come to a point where they need to sell but external conditions are not friendly: a recession kicks in, interest rates go up, tax laws are changed. You do your best to plan things according to conditions at the time, but once you decide it’s time to go to market, be prepared for something to change that might indeed affect your performance.
Moral of the Story: Selling a business is like running a marathon, preparation and flexibility are keys to success.
Tennessee Valley Group
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