Valuation: it’s not a formula, it’s a conversation
By Brett Goodyer, FCPA B.Com M.ForAccy – Forensic Accountant, Business Valuer, Bullshit Slayer
Let’s start with the thing no one wants to say out loud: if you’re calling your valuation “accurate,” you’ve already missed the point. Unless you have a crystal ball, a time machine, or the ability to control what buyers think, you’re not valuing a business, you’re making an educated guess.
And that’s okay. Because a business valuation isn’t about arriving at a single truth… it’s about using structured thinking and solid judgment to give someone the best answer we can, given everything we know right now.
I once had a client, an engineer, funnily enough, who nearly short-circuited when I told him the final number I gave him wasn’t “precise.” He’d built a career out of tolerances, blueprints, and control systems. He wanted the valuation to be like a circuit diagram; if X goes in, Y comes out. But business doesn’t work that way, especially for small businesses.
You see, every valuation starts with assumptions. Assumptions about risk, future earnings, about buyer appetite, and the economy not imploding next Tuesday. You can absolutely apply the maths properly, and you should, but the maths is only as good as the thinking behind it. The model is science. The inputs are art. And the art? That’s all you.
That’s why two valuers can value the same business and land in different ballparks, and both can be right, if they’ve explained their logic well. What matters is not the number. It’s the story that the number is telling.
This is where accountants have a huge opportunity. You have the trust, the history, and the insight that most brokers and consultants lack. If you take that and combine it with the ability to tell a coherent, well-reasoned valuation story, you become invaluable. You’re not just handing over a number, you’re helping your client understand what drives that number and what they can do about it.
A strong valuation says, “Here’s the value we’ve arrived at, and here’s why it makes sense.” Not just technically, but commercially. It should anticipate the client’s objections, explain the choices, and hold up under scrutiny. That’s what makes it defensible. That’s what makes it worthwhile.
Because let’s face it, this isn’t a completely academic exercise. This is real business. The valuation might be used to negotiate with buyers, resolve disputes, or justify investment decisions… If you’ve just plugged a few figures into a template without considering the bigger picture, you’ve done your client a disservice, and you’ve left yourself exposed if things go sideways.
I know it sounds like I’m downplaying the technical side. I’m not. The calculation matters. But it’s the lens through which you apply that calculation that makes all the difference. That lens is shaped by experience, instinct, and the ability to connect the dots between the client’s reality and the economic landscape.
The more you develop that lens, the better your valuations will be. Not more “accurate”—just more useful. More insightful. More able to help your client take action.
And look, the truth is, this job can be messy. You’re often valuing businesses that don’t even know where half their revenue comes from. You’re interpreting spreadsheets written by someone who thinks “miscellaneous” or “suspense” is a valid profit and loss line item, not a red flag. You’re reading the tea leaves and hoping the market doesn’t shit itself next month.
But that’s the gig.
If you embrace the uncertainty, trust your process, and keep the story front and centre, you’ll deliver something far more valuable than a fancy report—you’ll give your client clarity.
And for me and what I do, clarity is gold.