When Tom Taulli of BizEquity.com approached me to talk about his business, I was intrigued, but I also thought that it’d be fun to mix things up and ask my friend and colleague Klaus Holzapfel of Concept Bakery to conduct the interview. Klaus did, and here’s the result. I hope you find it informative as we travel through these difficult financial times…
Klaus: We know that the Credit Rating agencies are in the line of fire right now for apparently not understanding what they were rating. Many of the underlying financial instruments take at least three highly trained scientists to decipher them.
You might ask: How about some common sense in evaluating risks and businesses?
BizEquity focuses on evaluating business on criteria that we can understand, and, as founder Tom Taulli explains, the focus is on smaller businesses. If you are a small business owner, investor or simply would like to learn about small business valuations, you might find BizEquity.com a valuable addition to your toolkit.
Here is our Q&A:
If you check out the web, many of the resources on valuation can be tough to understand (you almost need an MBA to understand the finance details). Yet, valuing a company is very important, such as for estate planning, raising capital, the death of an owner, partnership disputes, selling a business and so on.
So, with BizEquity, you can get a rough valuation of your business – with a few clicks. At the same time, you get some valuable trend information about the industry. And, if you want a more refined valuation, there is a form you can fill out.
Q: Why do you focus on small business?
There are anywhere from 25 million to 30 million small businesses in America. For the most part, this is the driving force of job growth and innovation (just look at Google, which started just ten years ago).
However, it can be tough to run a small business nowadays, in light of the regulations, slow growth and credit squeeze. In other words, we believe there’s a big need for small business tools.
Q: How do you get the data for all your evaluations?

It comes from well-known sources like D&B, Experian and so on. Although, we are finding that this data can be spotty. So, we are going to add a feature that allows users to rate the data. Moreover, if your valuation is wrong, you might want to check with the credit bureaus. It might be a reason why you are not getting credit or having difficulties with vendors/suppliers.
Q: Do you have any adjusting mechanisms? Evaluations in our volatile days could change rather quickly…
As mentioned above, we will have a rating system. We also plan to have a way for a small business owner to claim his or her business. We think these user interaction features will make the site much, much better.
Q: What is your revenue model?

At this stage, we have no revenue model. Our goal is to build a useful site. Then, as we learn along the way, we’ll be adding services and relevant ads.
Q: Who benefits form your services besides investors and companies gearing up for an IPO?
Our focus is not on the large companies. They have CFOs and investment bankers to handle the complexities of valuations. Instead, we are looking to the small business owner, who wants some knowledge and help. For example, on our blog, we have a feature where you can ask questions to a valuation pro.
Keep in mind that a professional valuation can cost $2,000 to $20,000 or more.
Q: Do you have any strategic alliances or partnerships?

We have recently launched, so we don’t have any right now. But, now we are aggressively pursuing partnerships. We think we can be a big help to a variety of organizations, such as business brokers.
Q: What are your next steps?

We want to make the data better and valuations more accurate. This will be a short-term and long-term goal. If not, we will have failed.
We also want to provide more useful content for business owners. For example: what are the ways to improve the valuation of your business?
Q: What do you tell investors in a time when investment banking seems to drop off the planet?
Yea, amazing times, huh? Things have happened so quickly there really hasn’t been enough time to let things sink in.
Unfortunately, the fall of the major investment banks and the credit squeeze are going to be big problems for the economy. I can see things protracting for a while.
Thus, for small business owners, it’s more important than ever to focus on the key drivers of your business.
At the same time, when there is lots of upheaval, there is usually lots of opportunity.
Tom, thanks very much for taking the time to answer these questions, and Klaus, thanks for helping out with this interview!