In our last blog, we described why we chose the word Artisan as part of our name. Now we’ll share our use of the word “Value” in our name and why value is so important.
It sounds simple right? Value, when used in the context of a traditional valuation, is a number. It reflects how much a business, an asset or an investment is worth. As finance professionals, we are trained to think in terms of money and to quantify value in cash terms. And why not? Cash is objective and therefore easy to measure. Cash flow is synonymous with “the bottom-line” which generally commands attention (hinting that little else matters). A cash-equivalent value conclusion in a vacuum – measured at a point in time and in reaction to a compliance request – is traditionally how business valuation services have been provided.
The challenge with this approach, of course, is that the word value can take on different meanings. It can mean different things to different people and it can even mean different things to the same person at different times! Indeed, many business owners value such things as equality, control, diversity, unity, excellence, freedom, honesty, order, serenity or simplicity but how can they be measured? Some business owners want to sell in five years to the highest bidder while some place more value on employee retention or legacy. These types of characteristics and decisions greatly influence our process of working with business owners to not only measure value in the traditional sense, but also to manage and protect their business wealth.
To be impactful, when we begin any engagement, the starting point is for us to understand what is most important to the client. This is crucial because measuring the worth of a business without understanding the values, goals and objectives of the owner would be like building a home on a poor foundation. This synchronization of values at the start provides the proper foundation for a sustainable and meaningful relationship and for a more effective exit or succession planning process.
A business, like its owner, is an enduring entity. It is a living and breathing being with dynamics that are intertwined with its owner’s dreams and with needs that change over time. To simply measure value at a point in time and for a specific purpose is like checking your cholesterol once and never again. The benefits come from the process of doing something with that initial measurement so that you (or your business) will thrive in the future.
We believe in these concepts so strongly…that “VALUE is our middle name”.
In our next posting, we’ll share our use of the word “Advisors” in our name and why that is so important. Until then, we invite you to share your thoughts and create a discussion below.