Relatively few UK business owners understand what a business valuation does—and how they could benefit from the process. BVWire—UK notes that many owners, in fact, harbour misperceptions about the entire process.
Plimsoll, the data and industry research company, also offers a valuation service that they promote directly to business owners. Their business development efforts offer a good model for all business valuation experts trying to promote their own practise.
Some of Plimsoll’s promotional themes include:
- Make business valuation an annual checkup to see whether your business has, ultimately, increased in value. ‘Having your business valued should be like the MOT you get on your car or the blood pressure check you have at your doctor’s surgery,’ Plimsoll says.
- Recognise that current volatility makes valuation even more critical. ‘In these increasingly uncertain times, an annual business valuation should form part of your strategic planning each year.’
- Preparing financial accounts is procedural. Business valuation is forward-looking. ‘Why not take that mundane requirement and turn it into insightful, strategic exercise that adds value throughout the trading year?’ Plimsoll asks business owners.
Annual business valuations offer very specific and timely benefits, the firm argues. These annual checkups:
- Allow owners to set an annual benchmark and adjust their strategy;
- Provide the first step in succession planning;
- Help shareholder communications and keep them invested in the business’s prospects (and placate shareholders who are worried that COVID-19 has ravaged their net worth);
- Provide a basis for easier dispute resolution, when relationships sour, since both sides start from a common understanding; and
- Offer an inexpensive independent comparison to benchmark companies.
The business valuation profession in the UK is not well understood, so BVWire—UK applauds this kind of promotional activity to increase awareness. Not all clients will want an annual valuation, but perhaps they should.