Business valuation is a worldwide phenomenon. As an industry, it may not have the history…
By John Borrowman, CPC
Borrowman Baker, LLC, BV Staffing + Consulting
No matter how tight it may get when it comes to hiring at your shop, you’d always consider someone with a “book of business”. Wouldn’t you?
Of course you would.
“We want someone with a book of business.” It’s the phrase on most practice leader’s lips. Rarely does anyone stop to ask what that really means.
“Book of business” can be a slippery screening criteria. Many an employer has been burned by a poorly informed judgment about a “book”. If you’re going to use this criteria, make sure you avoid these pitfalls:
Misjudging the source. How much of your candidate’s revenue is attributable to her own work and how much is really due to her employer’s brand? If the gap between that brand and yours is very large, clients may not transfer as readily as you’d think.
Misjudging the price. It could be that your candidate’s clients are accustomed to paying rates that are less than (or maybe significantly less than) yours. How many of those clients will come over to you if they end up having to pay more for their work?
Both issues have to do with how much of that “book” you could actually hope to capture. Suggestion: Refer to your desire for a “transportable book of business”. That clarifies your objective and gives you a standard of measurement that will be much more helpful in the end.