This Week’s Featured Client Meeting

(based on actual client but details changed for privacy)

We met recently with an experienced business owner to begin the process of valuing her business for purposes of transitioning her ownership.  After our final meeting, as she prepared to leave she remarked that she enjoyed having a chance to look at her business from a completely different perspective. That was an interesting comment to hear from someone who obviously knew her business very well, had been at it for 30+ years, and was successful. 

Like most owners, she spends the majority of her time dealing with today’s “to do” list. Whereas, in contrast, our valuation process provided her with an opportunity to think about her business as a buyer would.  She found two key areas of particular interest.  The first was considering how a buyer would look at, and interpret her company’s financial trends.  The second was understanding the impact of her future business plan on driving value.

Financial Trends

What can be learned from laying 5 years of a company’s historical financial statements side by side and discussing the trends?  This is where we begin every valuation project and the business owner’s response is surprisingly consistent--”I’ve not seen my data presented this way.”  That is why in addition to our traditional business valuation process we created a web based tool so owners and advisors can easily complete a business valuation for planning purposes from their desk on their own time. This tool is called Business Trend Analysis + Valuation and you can check it out at  

Future Business Plans

We used our 8 Drivers of Business Value image as a framework for considering the different segments of her business plan and then prioritized the necessary actions that would result in increased value.

These eight drivers of value help an owner look beyond the financial statements to account for both quantitative and qualitative factors that impact business value, whereas many owners focus solely on the quantitative factors. This discussion offers the business owner the chance to look at the business as a buyer would, thinking about how to document achievement and strength within each driver as well as the future potential or capacity.  

This process is not something all privately held business owners know to do before they plan to sell their business. Our team at Capital Valuation Group is on a mission to change that and help privately held business owners understand, increase and unlock value in their businesses.  It is extremely valuable (no pun intended) to be proactive and understand the value years before it is time to sell so you can be in the best bargaining position when it comes time to start negotiating.  As we have shared in the past, value and price are not the same thing. Value is the starting point, and negotiations on price start from there. A business owner who can clearly articulate how each of these 8 Drivers of Value impacts their business puts themselves in a better bargaining position to support the price they are asking. 

We invite you to block off a few minutes this week to think through how these 8 Drivers of Value impact your business or your clients’ businesses. 

As always, we welcome any opportunity to talk with you about privately held businesses and their value.

Cathy is the President of Capital Valuation Group, Inc., headquartered in Madison, WI. Capital Valuation Group has been helping business owners across the country understand, increase and unlock the value of their businesses for over 45 years through keynote speaking, valuation analysis, determining damages and providing expert witness testimony. Cathy welcomes conference and event speaking inquiries and can be reached at