Greetings from South Dakota (again); the RV is parked just outside of Sioux Falls. We are making our way west to spend a month or so in Colorado before heading south to Texas for the November/December half of winter.
So last week’s conversation about my conversation with the AICPA stirred some emotions. My take: we practitioners could overlook a lot of stuff (and guff) if we weren’t seriously worried about competition (e.g., BizEquity, OQPs) and the problems it creates (e.g., firm differentiation, fee compression). The most direct comment I got: “We had a good thing going, and we f’d it up.”
On to this week. I guess I never really thought about what happens after delivering a report. All I let myself think is: report done – answer some questions – next client, please. But of course, there is that very last (and critical) step of “selling” the report to the client.
And if you’re new here, welcome aboard. This is what we do!
One thing I found last week: the seriously thought-provoking Habits vs Workflows blog post by Cal Newport (author of Deep Work). When most people talk about personal productivity, they tend to focus on improving the habits they deploy to wrangle their work.
But there is something more relevant: the underlying workflows that dictate what you spend your time using the habits you’ve developed. If you’re not focused on the right workflow (what you do), the best habits (how you do it) won’t get you where you need to be.
The real work begins after the report is delivered.
Maybe that is not a revelation for you. But it never occurred to me the way it did until one of my best BVFLS friends made that actual comment in a case we are jointly working on – appropriately, after we delivered our report to the attorney.
In litigation, you have to convince the attorney of the reasonableness of your inputs, assumptions, and conclusions. (And then again to the opposing attorney, his/her expert, and the trier of fact.)
Same with an auditor in any fair value valuation.
Same with the IRS in any tax purpose valuation.
Same with company owners in any buy-in or buy-out valuation.
In all these cases, you are selling yourself again. The first time was to convince someone to hire you. The second time is to convince that someone that they made the right choice (i.e., after the report is delivered).
If you want work, the first sale is important. If you want repeat work, the second sale is crucial.
Here are some ideas to make that second sale easier. To the extent you can, in each report you submit:
- Focus more on making it more reader-friendly and less standards-compliant (and you will still comply with standards).
- Put all of your major valuation assumptions in one section of the report where they will be easy to find.
- Provide support for all of those assumptions.
- Explain what you did and why.
- Explain what you didn’t do and why.
- Within your valuation schedules, include sensitivity analyses where appropriate.
And here’s a great tip to check for bias that Jim Hitchner gave to me:
- List all of your valuation assumptions on a sheet of paper.
- Indicate whether that assumption, all other things held constant, leads to a higher or lower result.
- See if there is a preponderance of assumptions that lead to a higher or lower value. If so, be prepared to justify.
In real life
I still call my clients every Friday to give them status updates for the projects I am working on. That helps a lot in greasing the wheels with the client to get them to buy into my inputs, assumptions, and conclusion.
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