Business improvement is challenging. Even harder? Measuring what matters to the end goals of ownership. Most advisors struggle to attribute which transformations actually nudged a business valuation in the right direction. Was it the big sales event, restructuring the org chart, website updates, or a shift in market sentiment? Whatever the case, eventually, when months or years of advice can’t be confidently linked to results, your client will be forced to — ‘snip’ — cut the cord.
Now you’re stuck back in BD hustle land, trying to secure the next client with long-term ambitions — all without the ammo of a tangible end result from the last big contract.
It’s not your fault. Not by any means. But there is a solution to this cycle. Because it’s fair to say that many private business owners seem, themselves, to be stuck in the short-term-ism loop, forever switching strategies as fast as the news cycle, obsessed only with reconciling their P&Ls for this quarter.
So how do you show ‘growth’ in business value before your client actually moves on from the business? What data can you use to back the next big play?
If you work with even one business owner who seems lost in the muck and mire of the trenches and the ‘new shiny’, rather than leading from the front with vision and plan, then our latest platform update introduces exactly the tool to keep them on track to real wealth creation.
How does Capitaliz Dynamic Revaluation Work?
Dynamic revaluation allows owners and their advisors to continually monitor changes in the company’s value and profitability. No more ‘wait and see’. You and they can now see today’s valuation attributed to four key factors:
- Economic factors like interest rates, inflation and foreign exchange rates;
- Industry factors like technological disruption or macro-economic trends
which affects that industry or its customers; - Financial performance; and
- Non-financial metrics considered to be risk factors.
The Capitaliz revaluation calculation algorithm integrates live financial data from your chosen accounting software to deliver an instant percentage-based valuation increase from mitigating risks across the above factors.
The latest in a series of updates for the Capitaliz platform, it unlocks the data about similar changes from 800+ businesses who have gone through the 21-step exit process, plots it against industry benchmarks, and then calculates the expected valuation at the planned point of sale, exit or succession.
Thanks to our proprietary algorithm and this sufficiently large dataset, we can make reasonable predictions of outcomes as they move through the process.
“A single valuation is merely a reflection of the business at a point in time. Private business owners must understand the iterative impact of improvements in each area of the business and how those accelerate the overall value.”
— Craig West, Capitaliz Founder
Prove the value of your lateral thinking
Anyone can slash a budget. It’s arguably the least creative approach to what may be other systemic problems in a business. But boy, does it look good on the balance sheet. Until now, the impact of incremental changes seemed near impossible to measure, and certainly not in real-time — as the results may take months or years to materialize.
Our approach ensures that valuations are consistently accurate and up to date, informed by four primary factors that affect business valuations, outlined above.
Dynamic Revaluation: Key benefits
The product enhancement (deployed November 2023) employs predictive intelligence to enable advisers to determine the monetary impact from changes and investments in a business, helping advisers to prioritize valuable areas for growth while avoiding areas that may yield little value enhancement or no result.
| Stay on track and the same page Your clients can easily view their valuation today and in the future to track the progress toward their company’s value potential. |
| Mark every milestone Every task completion is recorded to build a picture of the progress made — with the revaluation viewable on both your advisor portal and client-side. |
| Encourage consistent progress Create a positive feedback loop. As each action is completed, results show instantly rather than waiting for an annual or quarterly report. |
| Highlight high-impact activities Show clients where the wealth is hiding; actions that affect the valuation in Capitaliz are marked with the ‘Revaluation’ Icon to help prioritize their activities. |
Show your clients where they stand. And how much they’ve gained.
Whether you’re planning for a liquidity event way down the road with your client, or have to assist in what can only amount to a ‘firesale’ – identifying ‘what’, ‘where’ and ‘how much’ any given action will impact the end result is the closest thing to a crystal ball for businesses.
By providing complete clarity to clients about where best to apply their resources and attention, and tying that work instantaneously to the financial outcome, you’ll be in the best place possible to help them reach their goals. After all, effort applied regularly will outperform any single herculean effort.
If you’re a current advisor, the Dynamic Revaluation feature is now live on the platform.
To find out more about using Capitaliz in your advisory business, book a demo or sign up today.
