As a business owner, investor, or finance/leasing company, there are certain things that need to be accomplished every year in order to continue along the path of future growth and success. Each decision may require input from key employees and independent advisory collaboration to ensure the most informed opinions.
When valuation professionals are involved, they need to understand this broader transactional perspective and their specific role in it, so they can suggest the best scope of work to help move their client’s deals forward. When clients are considering engaging with a professional appraiser, ensure that their experience is commensurate with the ability to work within this broader environment.
Some of the key variables that valuation experts should discuss with their clients within the overall framework are:
The Effective Date of the Valuation: The written report date and the effective date are often different, depending on the circumstances.
The Appropriate Value Premises: There are potentially multiple distinct market levels of value to consider in an appraisal. Determine what the most appropriate of these is within the context of the transaction or internal decision-making process.
Desktop vs. On-site Approach: Which of these options is the right choice given the underlying requirements of the deal and the quality of the data already available?
Consulting Opinions: Appraisers can also provide comments on topics such as future (residual) value and remaining useful life. They may be able to consult with their clients on how the valuation work might impact the overall transaction or internal processes. Depending on the valuation professional's overall experience and background, the client might consider discussing more of the specifics of the ongoing situation to determine whether additional consulting insight is merited.
As the potential client, ensure that the valuation firm has the requisite experience needed to feel secure that their analysis and narrative report will be thorough. Less experienced appraisers can support the effort; however, avoid firms that use their junior staff to complete the research and legwork while the experienced senior manager takes only a minor review role.
Accomplishing both short-term and long-term business goals is one of the most important factors that will steer a company to its future success. Relying on the right team, including valuation experts, will ensure the best odds of realizing that success.