M&A Insights – British Cycling and the importance of having a plan

September 6, 2016

As Team GB once again ruled the velodrome, we take a look at the reasons behind this success and what we can apply to the preparation of businesses for sale

Every member of Britain’s 14 strong Olympic track cycling team won at least one medal in Rio.  It’s an astounding achievement by any measure.  Widen your lens, and you will see that the success of British Cycling is not simply confined to the velodrome, or even the recurring annual image of a British cyclist adorned in a yellow jersey gliding triumphantly along the Champs-Élysées.  Rather, we have seen a revolution in the sport at a national level.  Since 2012, there has been a 145% increase in the number of organised mass participation cycling events in the UK; British Cycling has seen its member ranks swell by over 130%; and over 1,000,000 new cyclists are now on the roads.

British Cycling’s transformation is nothing short of miraculous – “tragic to magic” as one paper put it.  But what can we learn from the past and continuing success of the sport?  One thing is apparent above all others: they have a structured plan and set the right objectives.

Sifting through the archives of British Cycling’s publications, you will see that the organisation runs a strategic review every 4 years; we are currently in the period 2014 – 2017.  At the outset of each of these reviews they set out their vision for the period, and what they are aiming to achieve.  In the current cycle (pun intended), they are seeking to:

  • Surpass the cycling medal tally achieved in London;
  • Increase once a week participation in cycling by 125,000; and
  • Get one million more women cycling by 2020.

These objectives are what we call SMART (Specific, Measurable, Achievable, Relevant & Time-based).  Objectives without these traits are not as effective, as one needs to be able to track and measure progress against them to see if they are likely to be achieved.  By any measure, British Cycling are achieving what they have set out to.  Applying Sir Dave Brailsford’s much revered system of marginal gains; we can see how the importance of SMART objectives and structured planning can aid in the achievement of a goal.  Even selling a business.

Here at Bluebox, we have recently relaunched our flagship Blue Diamond pre-sale planning programme, which is designed to do just that – assist our clients in the achievement of their goals.  Namely, increasing the capital value of their businesses, and increase the chances of a transaction successfully completing.  By taking the structured and measurable approach that we do, we can add significant value to our clients well in advance of an exercise.

The first step in any of our processes is a workshop session dedicated to setting SMART objectives, both qualitative and quantitative, against which we will measure our progress.  This session also gives us an opportunity to gain a thorough understanding of the business and the divers of value.  Thereafter, using a number of proprietary tools we have developed, we analyse the business in a number of areas; looking at likely purchaser groups, building the growth story (we call this the Opportunity Map), and potential issues that could arise in a due diligence exercise using DiagnostiX™ software.

Exit objectives

We then seek to agree a route forward, which is articulated in our Roadmap document, outlining the plan we will follow and key milestones along the way, up to the point at which we choose to ‘push the button’.  Throughout this period of preparation, whether it is 3 months or 2 years, we maintain a constant and structured monitoring of our progress against those objectives we agreed at the outset.

We are confident in the belief that we are the only people in the market looking at assisting businesses in advance of an exit in such a structured manner.  Don’t take my word for it – speak to our numerous happy clients.

So back to cycling: is British Cycling on track to achieving their objectives?  Well, the London medal tally was equalled in Rio, I’ve frankly never seen so many ‘once-a-week’ cyclists on the road, and who wouldn’t get behind the idea of reducing the proportion of ‘mamils’ on the roads by increasing female participation in cycling?  Tragic to magic indeed.

If you would like to learn more about our Blue Diamond programme, please do get in touch.

 

Harry Simmons

Senior Analyst

Harry.Simmons@blueboxcfg.com

 

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