How has the Pandemic impacted your client’s business value?” The 5 key questions to ask…

The recent pandemic most likely has had a big impact on small businesses, influencing their business value – all of which will increase their demand to better understand where they stand and what their business is worth. 

Steve Mize, ASA March 9, 2021

Business owner clients most likely have key questions that are top of mind and financial advisors are well positioned to engage in these types of conversations to help them make the best financial and business planning decisions.

  1. What is the current status of the business? 
    • Are they temporarily shut down, do they have limited hours, etc.? Is this regional, statewide, etc.? 
  2. Have they laid off employees, especially "key employees"? 
    • If so, what is the process or cost to rehire, train, etc. or will replacements be hired?
  3. Have there been any loss of customers or disruption in the production or supply chain?
    •  When they do re-open, can they get product to sell? Are their customers still in business?
  4. Did the company apply / receive funds for a PPP Loan? 
    • If so is that capital included in the acquisition?
  5. Have they put together a 12-month projection post-closing that takes into consideration the Covid impact? 
    • Does this projection take into consideration "ramp up time, hiring/training/re-opening?

Ultimately, these types of questions all impact the value of the business, which is critical to know as you advise them on their personal financial planning issues. Often these issues are very unique and specific to the nuances that owning a business brings.  Some of those can be complex for advisors to manage, such as valuing the business for estate, retirement, tax, succession and insurance planning purposes. In order to capture this opportunity, advisors need to expand their offering to include business valuation capabilities.

Where to start?  

Check out FinVal, our new, technology-enabled platform to quickly generate business valuations. This platform has been customized for financial advisors to support client-advisor relationships as an easy way to access valuation services that are intuitive and quick to develop a comprehensive valuation in 15 minutes.  These reports provide a a comprehensive valuation analysis via a 15-page report that has over 100 valuation factors included along with 3 valuations provided based on market, asset and income methodologies from over 20,000 comparables. In addition, gain access to experts in valuation, M&A, business brokers, SBA lenders and more to position advisors as the go to resource for business and exit planning implementation steps.