Scott Gabehart, Chief Valuation Officer at BizEquity, recently joined the Cannon Curve Podcast to break down the ways advisors can help guide business owner clients into their financial future. A summary of the discussion is included below.
LISTEN TO THE FULL INTERVIEW HERE
A business is often the biggest part of a person’s financial portfolio, and with new companies starting each day in the U.S., the opportunities for advisors to help are growing. Unfortunately, 90% of U.S. small business owners don’t have a firm grasp on the current valuation of their business or what KPIs they should focus on. Luckily, BizEquity's value proposition addresses that problem.
From the advisor's point of view, the ability to offer a business valuation analysis, including various KPI’s, gives advisors the chance to become the “go-to advisor” for a business owner. By understanding business valuation and learning the fundamentals and principles of it, advisors are able to add it to their toolbelt of offerings.
During the past 6-12 months, both average multiples and deal levels have been trending downward. It's safe to say that the middle market is outperforming both public firms and main street businesses. For example, in recent times, the number of deals valued at a billion or more has dropped by 60% and the deals below a billion have dropped by 24%. A lot of this has to do with the growing role of private equity. Private equity represents 30% of the M&A market. Spikes have occurred in acquisition throughout all industries and most recently prominently in professional service companies. The future course of the economy and the GDP by industry will affect the multiples within those industries.
The BizEquity algorithm has become more mature over the years and has adapted the process to fit the needs of advisors for them to help their business owner clients. We are constantly keeping pace with the needs of your clients and the industry.
Some of our most recent enhancements include:
- New Report Builder: Our new Report Builder enables users to personalize each individual client’s unique business valuation into a comprehensive yet concise report that includes all the insights they need and none that they don’t. Learn More.
- Minority Interest Discounts Module: The Minority Interest Discounts Module is designed to help you gain a more accurate understanding of the true value of a business, particularly in cases where there are minority owners with limited control over the company’s operations. Learn More.
- Officers/Owners Compensation Worksheet: The Officers/Owners Compensation worksheet gives you the tools to easily handle owners' compensation and scenarios when there are multiple partners by helping to identify and account for common adjustments such as multiple partners, part-time owners, related parties on the payroll, and more. Learn More.
To listen to the full Cannon Curve podcast featuring Chief Valuation Officer Scott Gabehart, click here.
