Covid times have changed many things for us all. Prior to March 2020 a bubble was one of those things that you blew, a pandemic happened elsewhere in the world, Zoom was an ice lolly or a hit by Fat Larry’s Band, you only thought you needed a jab if you were pretty old, and traffic lights were on the top of poles at road junctions.
Suddenly, though, all that has changed. While I confess that I have never quite been able to work out the sequence with which traffic lights changed at road junctions, at least it has always been totally clear what red, amber and green meant. That all changed when ‘traffic lights’ took on a brand-new meaning linked to Covid travel restrictions.
Not only have the colours meant different things at different times to different people, but they have also been open to different interpretations at any one time. In short, travel traffic lights are confusing, where lots of different voices prevail as one tries to make the right decision.
That decision isn’t just for our own purpose and destiny either. It is for those around us, and even after the decision is made, we can be dogged with questions of self-doubt, moments of absolute certainty, and then a change of view based on our lived experience of either the holiday taken or the time instead spent at home.
It isn’t just the holiday that this is about, it’s the travel there and back, the quality of the whole experience, the question of value for money versus the effort involved and the outcome experienced, and what everyone directly and indirectly involved feels about it before, during and after. In that regard, one might liken the travel traffic lights to the journey of selling, or not selling, your business.
The number of IFA businesses on the market at present, some of which conclude to a sale (green light), some of which stall for one reason or another (amber light) and some of which don’t conclude with a sale (red light), continues to be very high. It is of course an attractive sector for buyers, which means that returns for sellers are strong.
Succession has been acquiring the right kind of business for over seven years now and I would observe that over that period the range of factors influencing which colour both parties conclude the light should be has changed considerably.
There are many reasons for this. Some of those are controlled by parties completely external to both the buying and selling party – a bit like the Highways Agency who dig up the road and re-route the traffic. The effect of decisions made by the FCA, PI brokers and others can dramatically shift the outcome of the journey. Much more importantly though, a seller has the right to expect that they understand for themselves and from their brokers and acquirers what makes the path to a deal green, amber or red.
Sellers, like the traveller in today’s traffic light times, deserve certainty and safety, for it is they who have to decide for themselves, their clients, their staff, and their families which is the right path to travel down. Do show the red light to the would-be acquirer who appears to be holding something back, won’t give access to firms who have been previously acquired, seems reluctant to discuss challenges they have faced, changes deal terms for no apparent reason, wants you to change your client or staff journey for the buyer’s own gain, and has no real track record.
Selling and buying a business is all about entering into a partnership. In the same way as it is wrong to jump an amber light, it would be foolhardy to do anything other than hold on amber if the buyer won’t share with you what you ask for, you haven’t met enough people, very little gets put down in writing, or you are told that nothing at all will ever change.
But give the green light to the buyer who will create the right, shared, journey for you both, and can point to the many times that they have travelled that road with others. When the light is green the road ahead should feel clear and safe to travel on for all those who trust you to make it the best journey for them. There’s almost always a best road, and it’s usually the one where an experienced guide helps you to drive through a series of green lights.
Paul Morrish is a founder of Succession Wealth, and Succession’s Group corporate director
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