Every four weeks or so, my dad would take me and my brother to the barber for haircuts to give my mom a morning to herself (something I didn’t appreciate at the time). This was also our opportunity to visit the baseball card store. At some point, the focus shifted from packs of cards to the Beckett Baseball Card Monthly pricing guide, a listing of the market value of every baseball card. For $2.95 you could look up every card in a collection and see the monthly movements in card prices and put a value on a collection. I remember sitting on the bedroom floor looking up the value of a Rickey Henderson rookie card for the 100th time when my dad walked in and gave me one of those great dad life lessons. I was excited to tell him the card is up $1 from the prior month, and he said “That’s great, but unless you are going to sell it, the value today doesn’t matter, and even then, it’s only worth what someone is willing to pay.” Amazing how our parents get wiser as we get older.
Fortunately/Unfortunately for business owners, there is no Beckett guide for private companies. The value a buyer is willing to pay depends on a multitude of factors, too many for this discussion. However, in this uncertain environment we are in and will continue to be in for the foreseeable future, having an experienced advisor that can help position the company’s financials will be key to optimizing valuations.