Your non-finance clients are confused about valuation methods. How do you clear up the misunderstandings?
Valuation methods can be perplexing for non-finance clients, but simplifying the concepts can help bridge the gap. Here's how you can make these methods more understandable:
How do you simplify complex topics for your clients?
Your non-finance clients are confused about valuation methods. How do you clear up the misunderstandings?
Valuation methods can be perplexing for non-finance clients, but simplifying the concepts can help bridge the gap. Here's how you can make these methods more understandable:
How do you simplify complex topics for your clients?
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- Make it relatable by valuing a project is like valuing a house and ask What’s it worth now vs. what it could earn you later. - Show it visually; I created a Value Tree at Bupa during core modernisation to show how IT investment drives real business outcomes. - Ditch the jargon by keep it to the point. DCF : What’s future cash worth today? IRR : What return (%) are we really getting? I learnt a lot from McKinsey’s Valuation Book is a great deep dive if someone wants to explore further. Simple tools, clear logic; that’s how you bring people on the journey. #Valuation #Leadership #Strategy #DigitalTransformation #DigitalHealthcare #McKinsey #CoreModernisation #FinanceForNonFinance
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There is no one size fits all. The best is to understand the audience to tailor the message accordingly. In some cases you will need more visuals, or more technical terms depending on people’s experience.
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"Valuation isn’t magic—it’s storytelling with numbers. Let me break it down like this: "Think of your company as a house. Comparable deals (comps) are like checking Zillow—what did similar homes sell for? Discounted cash flow (DCF) is like predicting future rent income, then adjusting for risk—because 1 t o m o r r o w i s n ’ t 1tomorrowisn’t1 today. Precedent transactions? That’s the premium a buyer paid for ‘the neighborhood’—just like a bidding war over a prime property. Here’s the kicker: No single method is ‘right.’ The art is blending them to reveal what your business is truly worth. Still fuzzy? Let’s grab coffee—I’ll draw it on a napkin."
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Great posts and I think we have a verdict: it is about using layman’s terms, use relatable examples and visualize whenever it helps
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Explaining valuation to a non-finance client is like explaining jazz theory to someone who just wants to know if the song sounds good. I’ve found analogies beat numbers, every time. --> “Think of it like real estate...” instantly bridges the gap --> Visuals help—charts, flow diagrams, anything that makes the abstract feel tangible --> Avoid jargon. If you say ‘EBITDA’ without translating it, you've already lost them --> I once replaced a three-slide model with a sketch on a napkin, that closed the deal Simple wins. Not because clients aren’t smart, but because clarity sells confidence.