Relationships, risk, knowledge and governance key to retaining business owner trust
SAN DIEGO, Sept. 10, 2013 /PRNewswire/ — Despite trillions of dollars and billions of hours expended in pursuit of wealth creation, advisors often fail to answer the owners' central question of "Do you care?" Absent empathy, the advisor filters out owner relationship-driven decisions. Advisors who address these issues achieve: Linking their fortunes with the owner. The owner perceives their wants and fears are genuinely important to the advisor. And, owners are more likely to listen to and follow advisors' guidance.
Dr. Sheeler, Chief Valuation Officer of Business Valuations, Ltd. states: "Let's look at the professions of law, accounting and financial services. The attorney sees the world through the prism of mitigating risks. The accountant addresses compliance and tax minimization. The wealth advisor offers insurance and allocation solutions. While needed and well-meaning, these services require the owner to find time, listen and actively respond to advice. Where's the personal connection with the wealthy client?"
Relationships: If the advisor was to review how the company owner manages relationships, it's a conversation worth having. It may identify client or vendor concentrations that create risk. It may uncover key staff whose departure could be catastrophic without preparation. It may reveal the banker or insurer should be more involved in how the business operates. It may act as a catalyst to determine which family members have the tools to lead. Better relationships create higher company value.
Risks: "The heart of business valuation is quantifying risks. Lower risks create higher price multiples and the higher the multiple, the higher the value. Great valuators know how to identify and measure these value drivers. A valuation acts as a benchmark and road map for owners as well as a catalyst for advisors to align the owners' goals with their services. It's a win-win as the owner perceives the advisor has skin in their game and will follow," explains Dr. Sheeler.
Knowledge: A commitment to keeping egos at the door in the pursuit of openly learning where information gaps exist is the power of knowledge. The owner and advisors can then identify and leverage intellectual property, processes, ideas, staff talent, existing and new business relationships. Dr. Sheeler shares, "Opening paths to new opportunities and options creates synergies and higher value."
Governance: Whether it is to create a legacy or a charter within the business or the owner's family, there is a real distinction between administration, management and leadership. Owners seek the latter, so their vision is codified and exists well after they may no longer do so. Advisors addressing the first three key factors are more likely to engage multiple generations to ensure wealth and purpose remains.
Dr. Sheeler frequently presents on topics associated with leveraging relationships and knowledge as well as equity value enhancement ("EVE"). He will be doing so at the annual conference of the Exit Planning Institute in Cleveland on September 18 and on October 17 in San Diego at the Family Firm Institute's annual conference.
Since 1954, Business Valuations Ltd. serves midmarket business owners and their advisors for tax, transaction and transfer purposes as well as disputes. Dr. Sheeler has been the firm's steward, Chief Valuation Officer and litigation pit bull since 1992. He was Worth Magazine's 2012 Leading Advisor. His doctoral dissertation addresses private company illiquidity and is best known for measuring, creating and defending equity values.
Contact: Kelly Passmore, Media Relations @ Business Valuations, Ltd. 619-235-6635, x212 Email