Business Valuation: An Art of Serving Others—Second Quarter 2022
Business Valuation: An Art of Serving Others
NACVA Ethics Oversight Board
Do you ever stop to think about why you are in the profession you are in? As Simon Sinek would ask, “What is Your Why?”. Nearly two years ago, I left a firm after 14 years to relocate my family and start my own firm. At that time, I wondered, “Is this really what I want to do?” Turns out, the answer was, “YES!”.
I get romantic about the theory of business valuation. I love how the values derived from the income approach and market approach work out beautifully. I love how math, economic reality, and theory work in harmony. When that happens, it’s like birds are chirping and the sun is shining. However, when the math doesn’t work out so beautifully, it is a great puzzle to figure out. It can seem like a 1,000 piece puzzle of the forest. While difficult, the different shades of green portray a beautiful dense copse. The same is true with valuation, I love pairing information gleaned from management with the historical financials. At the end of each exercise, we have a work of art that can be tied neatly in a bow. That may be a bit dramatic and theatrical, but not for an excel nerd and appraisal geek like me… and maybe you.
Is that all? Is that where the love for this profession ends? If so, that might be okay. But, that is not where it ends for me. The true beauty of this great profession we are tethered to is in serving others. I invite you to think about that for a moment: Serving Others. It is offering a service that so few are capable of doing. It is giving peace to a family who is forced to take care of financial matters while grieving the loss of a loved one. It is offering an explanation of how a minority position in an entity can provide a discounted value to a couple who is the process of estate planning. It is providing reassurance to a divorcing spouse in knowing his/her business has been appropriately valued for purpose of assisting the courts in dividing marital assets. Offering our assistance can save a buyer from paying too much for a business. The business owner can now pay off the purchase in a timely manner and then start saving for the next item on his/her bucket list.
Business valuation is just another profession. It is number crunching and report writing. It could be categorized as such. However, I will always argue otherwise. It is providing a service that has the ability to save people money, give them peace of mind, and get them out of tight financial spots. THAT is why I love my profession. I invite you to spend time thinking about what is your why.