By John Borrowman, CPC
Borrowman Baker, LLC, BV Staffing + Consulting
The question was asked innocuously enough: Is appraisal a profession or an industry? Respondents to BVWire’s invitation to comment turned up the fire. The question will never be settled, obviously. Is it just a false choice, to begin with?
It’s no surprise that appraisers consider what they do to be a profession. It has all the earmarks: the ethics, standards, credentials and the organizations behind them. The profession is led by an aggregate of highly-skilled practitioners who insist that standards be kept high. Ask them whether it’s a profession or an industry, guess what they’ll say.
And that’s the way it should be. The last thing you want is to engage an appraiser who doesn’t operate as a consummate professional.
But, could it be that this very professionalism has spawned an industry?
Appraisers are skilled at making distinctions. Distinctions that have an impact on financial value. The importance of those distinctions has multiplied almost geometrically. One factor – always a factor – is the constant change in law and regulation that can trigger the need for an appraiser’s work. Attorneys, or their clients, anyway, seem to be seeing more value in the expertise the appraiser brings to bear. And are more prepared to pay for it.
Love it or hate it, the propagation of credentialed practitioners, alone, has brought a significantly higher profile to the profession. When more people hear about business valuation, more people buy business valuation.
On a flight in 1998, I opened up the airline magazine and saw a mention of business valuation included in the ‘brief bits’ running down the margin of the page. Most likely a PR plant with the reporter, that may have taken months to germinate before it hit the eyes of such a mass audience. But another pebble in the water until the ripples became waves.
The waves now support an industry. It’s hard to estimate the total revenue from appraisers who practice in business valuation. Does it break a hundred million? Who knows?
Leave aside that number and think about the jobs it spins out. Fifteen or twenty years ago, business valuation barely registered on the radar screen of your average grad student in finance. Today, it’s highly recognized. Growth of curricula at several universities reflects that.
Consider, further, the providers (ahem!) who work in service to you. Companies are making more and better data available to you than ever before. Publishers are putting out more books focused on keeping you in touch with the best in industry thinking. Just as you encourage your clients to rely on you, you’ve probably come to rely on these vendors.
At its core, appraisal has been and will always be a profession. From my point of view, it’s also become the sort of economic engine that you usually refer to as an industry.