When I sit down to write a report, I ask myself:
Who will probably read it?
- Who will be the most important reader (the one I have to persuade)?
- How knowledgeable are they about business valuation?
The answers to these questions shape two aspects of my writing:
1. How much background I will include (e.g., about the company)
2. How detailed my technical explanations will be (e.g., about how I developed the cost of equity capital)
I always strive to meet professional standards and specific regulations for types of engagements as far as the SUBJECTS covered.
Almost every one of my assignments falls into one of five categories:
Taxation
Transactions (real deals)
Litigation
Financial reporting
ESOPs
In tax work, the readers are my client, their attorney, accountant, and the IRS (the most important). I write to persuade the IRS, but also to give sufficient explanation to the others.
In transactions, the readers are my client, their attorney, accountant, the counterparty and their advisors, including possibly their appraiser. It is hard for me to tell who is the most important, but it is usually the client (buyer or seller) and their direct counterparty (the seller or buyer). These reports are the most variable in terms of background and technical explanations, depending on how many readers there will be, who they are, and the big difference between small single-location retail establishments and large businesses and how they are valued. I probably err on the side of providing too much, rather than too little, information and explanation in most cases, operating on the theory of better being safe than sorry. I
In litigation, of which I do very little, the readers are the same as in transactions. I assume that a top national valuation expert will read my report. Depositions are tailored to the attorney and testimony to the judge and / or jury. I provide everything including the kitchen sink to support my opinions in terms of detail and technical explanation.
In financial reporting, the readers are the company CFO and auditor. I find them to be highly sophisticated, and often my reports are relatively light on background and technical explanation for that reason. In my marketplace, which is highly fee sensitive, this gives me a strong competitive advantage.
In ESOPs, the readers are company management / owners, the ESOP trustee and the Department of Labor. I write to persuade the DOL. If I make a personal presentation to the ESOP participants, I treat it like highly simplified jury testimony.