*You don’t actually have to go to California, but I do recommend taking advantage of professional development opportunities whenever possible.
A senior member of the team and I travelled to California recently to attend the Advanced Business Valuation and International Appraisers Conference. The conference was hosted by the American Society of Appraisers, an international organisation representing all appraisal disciplines, including business valuation.
It was a jam-packed three days of hearing from expert industry practitioners and thought-leaders on diverse topics, including:
- Valuation of contingent (earn-out) considerations – Delayed payments based on various benchmarks require testing and review of assumptions to understand likely value to a transaction;
- Private equity valuation – Techniques PE firms use to assess and determine value and synergies in an acquisition etc;
- The anatomy of a deal – Deal structure and process, from offer to close – how to run and manage the risks effectively (whether for a seller or a buyer);
- Intellectual property valuation – Methodology and approaches;
- Aristotle’s rhetoric and the 21st century testifying expert – If a valuation is required for a legal settlement, what are the critical aspects to ensure a robust representation of findings for a specific valuation scope?
This blog is not setting out to repeat all that we learned in the US – you might nod off once I start on ‘EBITDA single period income capitalisation’! Instead I’m hoping to encourage other business owners to take up professional development (PD) opportunities relevant to their fields, by showing how the trip provided new insight into our business and our point of difference.
What we hoped to learn at the conference
At JPAbusiness we are in the throes of further developing our business valuation practice and corporate advisory services.
While many business owners request a valuation at a point in time for a defined event (e.g. business sale or acquisition), the hypothesis driving the development of our valuation practice is that valuation with relevant advisory support and performance management services is a practical method to assist our clients enhance business returns and performance.
As a business person, when you’re trying to identify a point of difference (POD) for your market segment, external testing and learning often helps to shore up your approach.
The question we were testing was: Is our POD just a POD, or is it actually going to provide a competitive advantage and add value and benefit to our customers?
Why the US?
Australia is a small market compared to the US, but we have comparable regulation and business challenges around valuations for going concern businesses.
In Australia, most of the attention relating to professional standards for valuation is focused on real property valuation. In the US the profession has a greater and more discrete focus on going concern business valuation. We wanted to leverage this specific practice management and professional experience.
What we learned
The following is a brief rundown of what we came away with, for ourselves, the business and our clients:
- Inspiration and tools to further innovate and develop our specialist valuation services for the Australian SME market;
- An understanding that we are on the right track in terms of developing our business valuation practice, with learnings on new techniques and approaches to enhance our services to clients – including different methodologies to determine opinion of value based on specific business and industry factors;
- Improved quality of services for clients, with methods that are tested, rigorous and have market perspective, and which are based on the best knowledge and experience from relevant and comparable international markets.
In short, the insights gained in California further energised me to continue investing with our team to offer these specialist valuation and advisory services to our clients into the future.
Professional development is for all of us
A couple of years ago I wrote an eBook with guest contributor Rosy Sullivan titled Training and Professional Development Advice for Small to Mid-Sized Businesses.
While the book clearly showed why you should invest in training and professional development (PD) for individual employees, our recent trip provided a great opportunity to reflect on the value of PD for a business director and/or owner, high-level manager and member of the broader team.
The value of taking time to reflect
I have found the most effective PD opportunities often enable reflection on accepted practices and methods by exposure to a different, although comparable, environment and market. This can provide a learning opportunity where you are challenged to actively assess, appraise and understand the application of these practices against what you know in your world (i.e. your team, your business, your profession).
In my experience, as business owners we often bypass PD opportunities, citing busy-ness, general lack of time, needing to deliver and so on.
However, a healthy mind is one that can focus on the here and now, and also on the longer term. It’s also healthy for the business mind to be challenged and, when you get home, you can usually apply your learnings pretty quickly, which makes the PD opportunity even more satisfying.
For more information about JPAbusiness’ range of business advisory, valuation and transaction services, contact the team on 02 6360 0360.
James Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.