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Breaking into Business Evaluations


Thinking about adding business valuation offerings to your practice? You are not alone. Business valuation is a multi-million-dollar industry, and accountants are well-positioned to capture a piece of it. Not only will you improve utilization and billings for the portions of the year not filled with tax work, but valuations can also offer higher margins and faster revenue growth than traditional accounting services.

If you are considering your next steps, use this outline as a blueprint.

1. Start with the current client base

As an established accountant or tax advisor, you may have a few clients who are considering selling their businesses over the next few years. Another opportunity is a client who is planning to take on a new partner or terminate an existing partnership. Business owners going through a divorce, dealing with a shareholder dispute, or wanting to obtain a loan may all be interested in having current and accurate information on the value of their business.

2. Be prepared for a steep learning curve

Learning new standards, creating models, and crafting checklists can take a significant amount of time. Be prepared for your first few valuations to take significantly longer than the subsequent ones. Consider your options for buying an existing software solution. Research it well – an error in the algorithm can have serious consequences for you and your practice. Build extra time into the deliverables schedule and be patient with your learning curve.

3. Hire a seasoned expert to review the first few reports

Approach all valuation reports you prepare as documents that must stand up against court scrutiny. No different from peer review of tax returns and financial statements, valuation reviews can offer insight into issues, identify a problem or an error you may have overlooked, and help craft an end-product that is impressive, complete, and accurate. A peer review of a valuation report will take an experienced professional a few hours, so be prepared to pay for the time in exchange for learning and protecting your client.

4. Consider offering valuation services in collaboration with other firms

As you become more comfortable with offering valuation services and build out your collateral of models, reports, and checklists, consider creating strategic partnerships with other practices that don’t have this in-house expertise. You would be tapping into existing client relationships and an introduction would carry more weight. Remember that building out a referral structure that works takes time and effort. If you choose to pursue this path, be sure to remain in contact with your referral partners regularly and think about establishing a formal service delivery agreement that will define expectations on both sides.

5. Consider valuation credentialing

Just like the CPA credential, the ABV (Accredited in Business Valuation) credential can help you establish yourself as a well-trained professional. The ABV designation is available through the AICPA for active CPA license holders. The requirements include experience in performing valuations, education, and an exam. Other options for accreditation include ASA (American Society of Appraisals) and NACVA (National Association of Certified Valuation Analysts).

As is the case with any other service, the valuation credential will serve you best when it’s well-marketed. Simply adding extra credentials behind your name on the business card won’t do the trick. Remember, most of the time a business valuation is not a necessity – so it will be up to you to explain the value proposition in a way that moves prospects to action. Starting with your existing client base is best, as you would be expanding upon a pre-existing working relationship. Networking with local attorneys and other professional firms can help identify prospects. The process of learning a new craft and building a referral network can take time, but the results are well worth it.

Business - Accounting Industry

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.