A Call to Opportunity (and Survival) As the use of artificial intelligence (AI) tools continues to become mainstream, it is no wonder that so many professional services are becoming even more commoditized than they were pre-AI. Many professional service providers, including valuation practitioners, are feeling the combined impact of price compression from clients and higher expectations of service quality and responsiveness. For those of us who plan to continue practicing as professionals for longer than the next few years, the long view is rather disconcerting. Within the next decade, AI is expected to become one-million times more powerful than it…
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Modeling Uncertainty to Gain Better Insight and Create Value Gary Lynch, founder and CEO of The Risk Management Project, proposes that uncertainty is the new normal and that firms that espouse risk management can create and preserve value. In this article, Lynch describes how his firm used quantitative models to assist a manufacturer assess how it should respond to a competitor’s price-reduction strategy and how the strategy would impact the supply chain. The analysis enabled the manufacturer to share the insight with suppliers that challenged the sustainability of the competitor’s strategy.
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Can private companies really increase their value 80-100 percent by limiting unsystematic (controllable) risks? The November/December 2013 issue of The Value Examiner featured Ken Sanginario’s article entitled, “The Valuation Business: A Strategic Road Map for Success.” In this article, Sanginario answers questions raised by skeptics to make the case that value doubling for private companies is possible.
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The next generation Pursuing an acquisition for the sake of improving the top line is risky. A company can focus on creating value by reducing their cost of capital and thereby improving their risk profile. Business valuation analysts are uniquely positioned to offer advice on risk and devise strategies for corporate clients to reduce risk exposure. These measures usually lead to improved sales, profitability and value creation. A solid foundation enables the firm to pursue strategic acquisitions with more confidence.