I have been valuing businesses for a long time, and during that time, I learned some things. It’s not just an exercise in number-crunching but a deep dive into the lifeblood of a business, which, at its core, is its people. Consider John, a business owner whose life’s work is etched into the fabric of his bespoke furniture manufacturing company. As we sat across from each other, the numbers on the paper were more than just figures; they represented years of dedication, challenges, and triumphs. This realisation underscores the essence of our role as valuers. It starts not with spreadsheets and calculators, but with a personal connection to the person or people behind the business, and what it is that they are trying to achieve – where are they in their business journey? Are they expanding? Are they wanting to retire? Are they restructuring their business into a more suitable structure? And ultimately, how can the valuation provide critical information that they can use, not only for their immediate needs, but to achieve their long term plans.

When you start looking into the valuation process, it’s evident that each business, from the vibrant high-street retail stores to the quiet, industrious manufacturing units, harbours its own distinct narrative. This is where empathy becomes a tool that helps deliver value. It allows us to see beyond the tangible assets and financial statements into the heart of what truly adds value to a business – its connection with customers, the ingenuity of its products, or the expertise of its service. When advising a retail business owner on their exit strategy involves not just evaluating their inventory but appreciating the brand value they’ve cultivated over the years. This is not to say that we can manufacture intangible assets where they don’t exist – rather it helps us to see the tapestry that connects the tangible and intangible as a whole and provide advice that can improve the business in the future. Our insights and advice can shape the future of the businesses we value, making our role not just about understanding, but about influencing their trajectory.

The conversation with John, and indeed with every client, goes beyond empathising with an owner’s attachment to their business. It involves a nuanced understanding of their operations, assessing the transferability of their skills and client relationships, and the potential impact of their departure on the business’s value. Where the story of the owner and the business are so intertwined that each is entirely reliant on the other, it is the job of the valuer to point out that this kind of symbiosis is one of the greatest threats to business value that exists. Through discussions with the owner, it is the valuer’s duty and that of their accountant, to not only point out the elephant in the room, but to provide advice that can alleviate the issue. And if we can’t assist in the actual implementation of the fix, we should help them engage someone who can. Maybe a fractional CFO or CEO? Someone with the right skills and the time who can put the work in to help the business actually implement the changes we recommend.

This collaborative dance between the valuer and business owner is what transforms the valuation from a mere analytical task to an art form. It’s about creating a narrative that captures the essence of the business and respects the journey of the individuals behind it. Our interactions with clients like John are not just transactions; they are opportunities to weave a story that brings numbers to life, honouring the legacy of the business while casting a vision for its future.

When we take on the challenge of performing a business valuation, let’s remember that, at its core, it’s about understanding and valuing the human stories intertwined within the business. This approach not only enriches our professional practice but also deepens our appreciation for the diverse tapestry of businesses we encounter. Through empathy and collaboration, we can truly master the art of valuation, providing meaningful and impactful insights.