As a seasoned veteran in the art and somewhat mysterious science of business valuation, I’ve come to appreciate a rather unconventional tool in our arsenal – emotional intelligence. Emotional intelligence in business valuation isn’t about getting touchy-feely with the balance sheets; it’s about understanding the human story behind the numbers.

In this line of work, where numbers are our bread and butter (or steak and wine, if you prefer, and I do prefer), it’s easy to forget that these figures are more than just digits; they represent dreams, sweat, and sometimes, tears. That’s where emotional intelligence swings into the picture – it’s like having an extra sense, a sort of sixth sense for finance, if you will… (I see debt, people).

Picture this: You’re sitting across from a business owner, and you’ve just presented your valuation. Now, this isn’t just any number; it’s a number that encapsulates years of hard work, sacrifice, and hope. As their face changes, you realise that this is where your job transcends mere number crunching. It’s about reading the room, understanding the unspoken words, the hopes, and fears that hang in the air like a thick fog.

This, my friends, is where emotional intelligence shines. It’s about empathy – not just understanding, but feeling what the business owner is going through. It’s about navigating through a sea of emotions while keeping your professional compass steady. And let’s not forget, a dash of humour can sometimes be the best medicine, especially when the numbers aren’t singing the tune the client hoped for.

But emotional intelligence isn’t just about playing nice. It’s a strategic tool. It helps negotiate and explain complex valuation concepts in a way that doesn’t make your client’s eyes glaze over. It’s about building trust, forging connections, and sometimes, being the bearer of hard truths in a way that’s palatable.

Now, I’ve been in the trenches of valuation long enough to know that this isn’t your typical finance gig. You’re part analyst, part therapist, and part storyteller. You’re dealing with people’s dreams; their legacies. And in this high-stakes emotional theatre, your ability to read between the lines, to understand what’s unsaid, becomes as crucial as your ability to crunch numbers.

Even though our world revolves around numbers: ratios, margins, and financial models – let’s not forget the human element. After all, businesses are built by people, run by people, and, eventually, valued by people. So, as we dive into our spreadsheets and reports, let’s keep our emotional intelligence toolkit handy – it might just be the thing that helps to turn a good valuation into actionable insights, and improved outcomes for the stakeholders. Valuations provide more than just a static number. They should also provide understanding – sometimes it’s a dose of reality that brings an owner crashing down to earth, sometimes it merely confirms expectations – but in nearly all cases, it can also provide a roadmap to lower risk, greater profits, and improved value. And for me, that’s the bit that is the most rewarding – helping the people that are behind the numbers.