What's on my mind

Business during Covid: the six Cs

18th September 2020

The pandemic has been a chance to reflect, but there are issues to consider if you are planning to sell, acquire or pivot

Regular readers of my Money Marketing columns will know I have a penchant for lists and alliteration.

Set out below are my “six Cs”, as opposed to the recently announced “rule of six” by the government.

They represent a distillation of the main issues I am currently discussing with directors and partners of firms where they are either contemplating their future direction, considering a sale, or making acquisitions.


Although Covid-19 has affected and is continuing to disrupt most people’s lives to varying degrees, and there is no early end in sight, there have arguably been some positive consequences. One of these is that it has prompted many owners to reflect on what really matters to their clients, their colleagues and themselves.

Many advisers have found most of their existing clients are prepared for and even welcome dialogue via Teams or Zoom, and that mutually beneficial efficiencies can result.

Advice firms have also found that for some staff, working from home at least some of the time is likely to be a beneficial long-term option.


I have recently seen an increasing concern about possible changes to taxation in the autumn Budget, with particular reference to capital gains tax. This has prompted some people who are selling their businesses to try and complete the transaction before the Budget. This pressure produces a number of challenges, and the old adages of “Act in haste and repent at leisure”, and “Don’t let the (tax) tail wag the (deal) dog” come to mind.

The sale of any business is usually a once-in-a-lifetime event, and it needs to be planned and executed with care and diligence. Yes, it is possible that a tax increase may adversely affect sale proceeds, but the underlying rationale for the sale must still prevail.


Culture is at the core of any successful intermediary firm, and the past six months have been an ideal time to reflect on what really matters. Gaining insights into the values and ethos of a business you are thinking of joining or acquiring is a key factor to the likely success of the transaction.


This has two meanings. First, asking ourselves how considerate we have been to both our colleagues and ourselves in light of the impact of Covid-19. Second, where transactions are being contemplated, it is important not only to pay attention to the actual amounts of the payments, but also the risks attached.

For example, a headline number is likely to be subject to attaching conditions, and it is important not to make assumptions or hope for the best. Instead, apart from appointing experienced advisers such as solicitors and consultants where appropriate, it is also vital for the owners of the business to understand what is in the contract and the obligations that come with it.

Unfortunately, there are too many ex-owners of financial advice firms/IFAs who are unhappy with an eventual outcome as they did not spend enough time trying to understand the detail before they signed on the proverbial dotted line.


It is increasingly the case that many intermediaries who want to sell their business do not want to retire immediately, but rather remain an adviser at least for a period of time. They often focus only on the immediate and deferred payments they will receive from the sale and pay little or no attention to the amount they will be paid as an adviser or the terms and conditions attached to their new role.

For an individual who remains in place for, say, five years post sale, their remuneration over this period could potentially be a significant amount relative to the sum paid for the business.

So time and effort should be put into ensuring that the package on offer is both competitive, reflective of the needs of both parties, and one that rewards the vendor for new business secured aside from being paid to continue to advise clients.


What I occasionally witness from the business owners I work with is a determination to press ahead with a transaction before their fellow directors or partners, let alone advisers, are brought in and are ready. Often, it is not that the business logic is weak, but rather that those around the individual have not been sufficiently involved. Building consensus is vital to the success of any project or transaction.

It is also fundamentally important to have the support of one’s family before embarking on a major change such as the sale of a firm. Effective planning has good communication at its core.

This article was originally published on Money Marketing

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