Fred Hall, an accredited business appraiser, is one of those people that loves Microsoft Excel, and has spent significant time tweaking it to run complex regression algorithms and output valuation models. He actually uses a lot of those strange statistical functions in Excel and I imagine Microsoft must be pleased they actually have someone using them. I’ve sat down with him a number of times as he walked me through the various valuation methods, and how his spreadsheet models and templates help him validate or invalidate the different methods for each appraisal he does. I’m good with Excel, but after a while my head is spinning. It is very impressive stuff.
Fred’s been busy this year. He’s done 23 valuations so far, about half for SBA bank loans. Most banks already had a policy of getting a valuation done, but new regulations say they HAVE to have one done, and it must be from an accredited appraiser. He has done a few for C-corps that are converting to S-corps (to get an estimate of the value of Goodwill at the time of the election), and he’s done a few for owners of companies who were tapping their 401k to financing their business. People are using their 401k’s not only to purchase businesses but also to get additional financing for their existing companies.
He said his most involved case was a valuation of a minority shareholder’s interest in a large engineering company who was going through a horrible divorce. He was on the witness stand giving expert testimony for almost 4 days, and he won on 5 out of 6 issues against a CPA who has been doing divorce litigation for 25 years.
I can’t see things slowing down for Fred. It seems like regulatory pressure has increased the demand right now, but the expected boom in baby boomer business sales will keep the demand up. It’s a good thing he likes Excel.
You can contact Fred directly if you have questions or are interested in a valuation: fred-at-compasspointcapital.com
Want to learn more? I’ve organized and categorized my blog posts into a free online guide on how to sell a business: www.sellbusinessguide.com