Valuation professionals often get asked about their experience in specific industries when bidding on new appraisal projects. This is a reasonable question to receive from potential clients looking to engage with the most qualified candidates; however, a strong response can be tricky to formulate, given that most accredited appraisers do not confine themselves to any given industry.
The majority of professional appraisers, whether they specialize in business valuation, machinery and equipment, personal property, or real estate, cannot afford to focus on a few specific industries, as this limits the number of opportunities for work and can stunt the future growth of their business. Firms that focus solely on valuation work can effectively value companies and assets across all existing industries.
Continuing education and developed experience derived from a career as a valuation professional focus on implementing consistent and effective approaches and methodologies, regardless of the industry. Appraisers will always consider and rely on the relevant market and industry data sources developed during every valuation process. Understanding how to research, review, and analyze this data, while independently concluding on value, is what separates the experienced accredited appraiser from the rest of the pack.
There is a distinct difference between experience and expertise. As an appraiser, you may have years of experience valuing businesses within many different industries, which is useful when potentially working in those same markets in the future; however, your expertise will always be in valuation and does not require an industry focus.
On the flip side, there are industry-specific experts across the spectrum who consult their clients on any number of business decisions that can affect a company’s future success. From market trends to investment opportunities, industry experts drill down deep to fully understand how best to work successfully within these specific sectors. They might understand the concept of valuation and have certain opinions; however, their focus is not on appraisals, and they probably aren’t the best option to independently appraise the companies and assets within their chosen industry.
In summary, it is important to advise potential clients of these distinctions and the fact that your expertise is in valuation and not limited to any particular industry. An effective response can help explain this and how you will consider important factors within their specific industry as part of the overall appraisal, while applying accepted, time-tested methodologies, resulting in an unbiased, supportable conclusion of value.