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What every business owner needs

June 13, 2016
Read Time: 0 min

Would you like to provide more services to each client or to improve the quality of each client conversation? Conferring with a client for the first time, or perhaps a friend we’ve known for years who is now in need of a business valuation for exit planning or other reasons, doesn’t always paint a clear picture of the business owner’s needs.

An aging owner might approach a valuation firm saying, “What is my company worth? Retirement is around the corner and I need to know the value of my work.” At the surface, it seems clear that the owner wants to exit the business and needs to determine the price. On one hand, valuation professionals are trained to help the owner understand the fair value of the company. But after hours of work determining a realistic value or range of value and producing an extensive report, you may find that the owner sometimes cares little about the explanation or analysis. The focus is on the final answer.

Now what? Has the firm done its job by providing the answer and sending the business owner on her way? What about the basis of the final valuation report? Can insights learned during the valuation process generate additional engagements with the client?

Top firms know that the valuation report is tailored to the business and the owner, exploring the history of the company and analyzing every aspect. The conclusions a valuation professional can draw from performing the valuation can be significant. From inventory issues to strategic opportunities with intangible assets, a goldmine of insights for the business owner is often developed in the process of generating the valuation. Yet, the owner often focuses on the end result: the final dollar value of the company.

Too often, business owners, particularly of small-to-medium-sized businesses, are caught focusing on the short term. A valuation engagement is an opportunity to get under the hood, figure out which parts need to be replaced and make improvements that can improve a variety of areas from R&D to profitability. For example, if a business owner learns that intangible assets are driving 75 percent of the company value and, through greater diligence of intellectual property management, the value would increase, the owner might decide the cost of hiring an expensive patent lawyer is worth it.

Rather than simply allowing the business owner to focus on what he or she wants, consider helping the owner understand what he or she needs..

This shift in thinking enables firms to drive more value for existing clients. Help the business owner understand what is driving value, not just he value. If the owner is happy with the company’s performance, how happy would he or she be with a 10 percent increase in revenue? If the company clearly needs help, let the valuation process diagnose challenges and be prepared to offer help implementing solutions. Thinking like the business owner will ultimately drive more value both for the client and the valuation practice. Advisory services can extend over many years as a company prepares for the eventual exit or the owner prepares for succession. Selling advisory services can be as simple as asking the right questions.

As a public accountant recently shared with me, a small business owner sometimes cares only about the amount of money in their bank account. Wouldn’t every owner like to double that number? Your firm might be able to reveal that opportunity and help them achieve growth they didn’t even know was possible.


Additional Resources
eBook: Next-Level Accountants: Your Guide to Growing a Firm of Trusted Advisors
Checklist: How to Sell More Valuation & Advisory Services: 17 Questions to Ask Every Prospective Client
Checklist: Think like Your Client: Winning Valuation Engagements with Business Owners

Sageworks Valuation Solution
Sageworks Valuation Solution is a web-based, business valuation solution that helps firms streamline workflow, scale existing processes and increase realization rates. Explore features and benefits by watching a one-minute walkthrough video.

About the Author


Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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