Business valuation, a must for SMEs

Small and Medium Enterprises (SMEs) have been urged to undertake frequent business valuation to be able to access credit.

“The goal of a business valuation exercise is to arrive at a clear and supportable estimate of what the fair market value of the business which is not only important when business owners seek to sell shares or merge, but also when seeking capital from equity investors or financial institutions. Most owners of SMEs in Ghana, however, do not see the need to value their businesses,” Joshua Adofo Boanya, a certified valuator and analyst has said.

Mr. Adofo Boanya was recently credentialed by the Africa Association of Certified Valuators and Analyst (AACVA) as the 11th Certified Valuation Analyst (CVA) in Africa.

The CVA credential is the world’s leading business valuation professional qualification. Mr. Boanya further indicated that in the past most professionals in Africa did valuation without the requisite training or credential. Things have changed since the establishment of AACVA and professionals across Africa are being credentialed and trained to deliver business valuations to international standards.

Data from the Registrar General’s Department show that 92 percent of companies registered in Ghana are SMEs.

SMEs also provide about 85 percent of manufacturing employment and contribute about 70 percent of GDP. With such high contribution to the economy, Mr. Boanya believes that when SMEs access capital and expand, their impact on the economy will increase, adding: “Good business valuation can promote access to capital for SMEs.”

The President of AACVA, Bennet Kpentey, congratulated Mr. Boanya on his credential and added that the CVA is a stamp of professional recognition that a business valuator has met all the criteria to undertake and sign business valuation reports.

Mr. Kpentey was confident that his colleague will contribute to the growth and development of the business valuation profession in Ghana and Africa.

According to Mr. Kpentey, AACVA, which was established in 2005, is the Africa Chapter of the world’s leading business valuation organisation, National Association of Certified Valuators and Analyst (NACVA), with headquarters in Salt lake City, United States.

NACVA provides worldwide support to professionals all over the world through which AACVA’s members access credentials, training, standards, guidelines and codes of ethic for practitioners. NACVA also promotes continuing professional education and the entire body of knowledge in business valuation to ensure that valuations meet globally acceptable standards. AACVA currently administers the CVA credential to qualified professionals in Africa.