I apologize for the intrusion … appearing in your inbox just last Wednesday and now again today.
But the message I have to share is too important to wait for my next regularly scheduled broadcast.
In the early 2000s, $5000 valuations started popping up.
The practitioners in my generation laughed and carried on, business as usual.
Then, there were $2500 valuations.
And we ignored the emergence of new business models.
Then, those new business models begat $500 valuations.
And still we, and now a new generation of practitioners, turned a blind eye.
Now, valuations are FREE. Let that sink in.
Because that is what TD Bank will be offering its business customers.
In case you missed the new news, here is the drop-the-mic Philadelphia Business Journal article that we should not laugh off … cannot ignore … and must not turn a blind eye to.
Here are the highlights. I implore you to read them.
- Ranked by assets, TD Bank is the #8 bank in the US; it’s footprint stretches from Maine to Florida.
- TD Bank will pay an annual fee to BizEquity for the right to provide valuation reports to its business customers free of charge.
- TD Bank vetted the product with some of its small business customers before agreeing to the contract with BizEquity.
- TD Bank has 500,000 business customers with revenues of $500 million or less that are candidates for the BizEquity service.
- The head of TD’s commercial bank, said that with the economy booming, there is fierce competition requiring banks to differentiate themselves.
- BizEquity already uses financial service companies such as Brinker Capital, Envestnet, Univest, MassMutual and Penn Mutual, to distribute its product.
- And last September, BizEquity announced that it had joined with The Wall Street Journal and Dow Jones on the launch of a new valuation tool called “the WSJ Pro Business Valuator” aimed at WSJ customers who are private equity investors, merger and acquisition advisers, and entrepreneurs.
- The relationship with TD Bank is important because it is the first major bank to contract to use the service. BizEquity’s president noted that the deal with TD Bank is not exclusive and could lead to more big banks becoming clients.
- BizEquity is working on an enhanced product that not only provides valuation but also suggests how to optimize the business moving forward.
Before you start telling me or yourself or your colleagues about all of actual/ likely/possible failings and shortcomings of BizEquity or their reports … JUST FREAKING STOP.
Stop focusing on us, the sellers.
Start focusing on the clients, the buyers.
Clients don’t understand valuation credentials and standards.
They don’t know how much or how little human judgment goes into a valuation.
They don’t know or care why it takes 4-6 weeks to deliver a report.
All the clients know is that option #1 is free and option #2 is not (by a long shot).
And if their attorney or banker says the BizEquity option is “good enough” for what they need (whatever that need is) that is all clients need to hear.
The more important issue is WTF are YOU going to do?
BizEquity’s self-stated mission is to help small businesses and their advisors understand business value better, faster, and more cheaply. [emphasis added]
And they are doing it, no matter how much we might want to disparage them.
And while Rome is burning, we have no unified industry voice to sing our profession’s praises to our audience of leads, prospects, clients, and referral sources.
Instead, we BVers and our organizations bicker amongst ourselves about credentials and standards. What are we thinking? (Is this – really – where the battle will be won?)
All while someone else is busy actually standing for something.
I leave you with the opening paragraphs of Daniel Hood’s words in his article “Disrupt Yourself,” which appears in the July issue of Accounting Today.
The annals of business are full of stories of companies and industries that have been disrupted or disintermediated or even downright destroyed by changes beyond their control, but there is a definite paucity of stories of businesses disrupting themselves on purpose — which makes the increasing calls for the accounting profession to do exactly that seem riskier than they may, in fact, be.
The argument for self-disruption is fairly simple: Massive technological, demographic, social and business-related changes are about to wash over the profession (along with just about every other sector of the economy), and for accountants to leapfrog the wave seems preferable to picking themselves up and adapting after the deluge passes.
Yes, Mr. Hood is addressing his accounting profession.
With great respect, I borrow his words to address our valuation profession.
How will you disrupt yourself?
Who are you?
What do you do?
What makes you different?
Because the disruption is coming.
And no person or organization is riding in on their white horse to save your day.
It’s up to you.
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