When asked about the longer-term viability of the BV industry, I often smile and point…
John Borrowman, CPC
Borrowman Baker LLC
Most practitioners who have been in the BV game for some length of time have come to know that hard work would typically generate X revenue in a given year, even if they didn’t really know where it was coming from. That balloon has popped, perhaps for the first time ever.
Being ultimately successful in the BV profession requires coming to grips with the fact that – as nearly everyone will tell you – “it’s not annuity work.” In fact, this simple distinction can sometimes be an irritant for practices located inside a CPA firm.
Still, if you’ve been actively pursuing the profession for at least 10 or more years and are making a material contribution to revenue, you are probably familiar with this phenomenon. You may not know exactly where the next engagement is coming from. But, you know its coming.
It’s that confidence that has taken a beating in the recent recession.
On the one hand, this shrunken level of confidence is not much different from what you probably see in your own clients. On the other, the fact that it has happened at all is what is different for BV professionals. It’s impacting practices in two key ways.
First, practices are cautious about adding to payroll without the confidence that pipelines are steady. Optimism that we encountered in Q1 has given way to “wait-and-see” as the summer wears on. Uncertainty about what lies ahead for estate tax legislation plays a role in those practices which have traditionally done a significant amount of work in this space.
Second, professionals themselves are cautious about considering a career move, even when there appears to be an up tick in overall hiring. This is especially true of the higher quality professionals. With layoffs still visible in the rear-view mirror, they fear becoming victim to the “last-hired, first-fired” if their new employer’s pipeline sputters.
On the whole, business valuation is likely to spend much of the rest of 2010 getting its legs back under it, and re-establishing the level of confidence that was such a key element in the growth of the profession up to now.