When is a second opinion useful?
You may have received a buyer’s offer, a broker’s estimate or a valuation prepared for another shareholder. A different number does not, by itself, prove that either assessment is wrong. One may value the trading operation while the other describes shares after debt; one may assume a sale now while the other assumes a period of growth.
A review is useful when the explanation is incomplete, a material assumption is disputed or a decision depends on understanding the downside. Bring the original assessment and its terms of use. Access to the workings and underlying information determines how far a reviewer can go.
Choose the review you actually need
There are different levels of work. Agree the deliverable before commissioning an additional report.
| Scope | Useful output | Important boundary |
|---|---|---|
| Assumptions review | A schedule of questions, inconsistencies and evidence gaps | Does not necessarily provide a new opinion of value |
| Model and calculation review | Examination of calculations and how inputs reach the conclusion | Reliable arithmetic does not establish reliable inputs |
| Fresh valuation | A new assessment for an agreed purpose and date | Requires its own information, methods and engagement terms |
A report prepared for one party is not automatically available for another party to rely on. We discuss permission, confidentiality, conflicts and any intended third-party use before accepting work.
A practical reconciliation: £1.2 million versus £900,000
Hypothetical example, not a market benchmark. Assessment A applies an illustrative 4.0 times multiple to £300,000 earnings, producing £1.2 million enterprise value. Assessment B applies the same multiple to £250,000 after allowing £50,000 for replacement management, producing £1 million enterprise value. B then deducts £100,000 net debt to reach £900,000 equity value.
The £300,000 headline gap contains two separate questions: a £200,000 effect from the earnings adjustment and £100,000 from comparing enterprise with equity value. The next step is to test the management cost and debt definition, rather than average the two headline numbers. Neither the multiple nor the adjustment is a recommendation for another business.
The evidence that helps resolve a disagreement
- The complete report, valuation date, engagement scope and model if available.
- Accounts, current management information and a bridge to the earnings used.
- Details supporting owner remuneration, exceptional costs and related-party transactions.
- Debt, cash, director loan and working capital schedules.
- Share rights, relevant agreements and the precise interest under discussion.
Label facts, management assumptions and disputed items separately. A short unresolved-issues register can make an adviser discussion far more productive than exchanging competing totals.
Diagnose the gap before paying for a second report
Use a comparison sheet with a column for each assessment. Record the same six items in both columns: valuation date, interest valued, definition of value, earnings period, earnings adjustments and cash/debt treatment. Only compare the conclusions after those headings are aligned. A model can be internally consistent while answering a different question from the one you need.
| Difference | Evidence to request | What the review should resolve |
|---|---|---|
| Historic versus forecast earnings | Dated forecast, latest trading and forecast-to-actual bridge | Whether the outlook and chosen period are supportable |
| Owner salary removed in one report | Role description and replacement cost analysis | Whether the continuing business has been fully costed |
| Different market comparisons | Source date, business characteristics and transaction basis | Whether the comparisons are relevant and consistently defined |
| Different value for the same percentage holding | Share rights, restrictions and engagement instructions | Whether the interest and assumptions match |
Give each issue an owner and an evidence status: supplied, requested, unavailable or disputed. This turns a disagreement about totals into a manageable list of questions. It also helps avoid commissioning a broad revaluation when a narrower clarification could resolve the immediate concern.
When a review should pause rather than produce another number
Missing workings, an unresolved ownership question or a disputed contractual instruction can prevent a useful like-for-like conclusion. State the dependency and seek clarification instead of filling the gap with an assumption that happens to favour one side.
For a shareholding, do not apply a standard minority discount simply because the percentage is below 50%. The rights, restrictions, valuation basis and relevant instructions need consideration. A legal interpretation should be obtained from the appropriate adviser where it affects the brief.
Agree how findings will be delivered: for example, an issue register, a reconciliation of value differences and a statement of what further work would change the conclusion. Ask which finding is material to your decision. A minor arithmetic correction and an unsupported assumption driving most of the value should not receive equal attention.
From review findings to a useful next step
Ask for a reconciliation explaining which differences are factual, which reflect methodology and which need further evidence. A conclusion may remain a range if an important uncertainty cannot be resolved. A second opinion should not be commissioned on the promise of a higher value.
Where litigation or a formal dispute is involved, tell us at the outset. The appointment, duties and report requirements need specific consideration with your legal advisers. This enquiry is for suitability and scope; it is not an automatic expert-witness appointment.
Your next-step checklist
- State what decision depends on the existing valuation.
- Confirm access and permission to share the original report.
- Identify the valuation date and exact ownership interest.
- List the assumptions you want examined, rather than a target result.
Frequently asked questions
Will a second opinion increase my business valuation?
Not necessarily. A review may support, reduce or challenge the original conclusion. Its purpose is to explain the evidence and assumptions, rather than reach a pre-selected number.
Can you review a buyer’s offer?
We can discuss reviewing the financial assumptions and comparing the offer with a valuation brief. Price, financing, deferred payments and other deal terms need to be considered separately.
Do I need a completely new valuation?
Not always. An assumptions review may answer the immediate question. Where a new opinion of value is needed, its purpose, evidence and deliverable require a separate agreed scope.
What should I ask the original valuer before commissioning a review?
Ask for clarification of the valuation date, subject, basis, earnings adjustments, comparison evidence and cash/debt bridge. Access and permitted use depend on the report’s engagement terms.
Can two different valuations both be reasonable?
Yes. They may use different purposes, dates, evidence or assumptions. A review should first reconcile those differences, then assess whether the remaining judgements are supportable.
Professional context and further reading
This page provides general preparation guidance from Consult EFC. Its worked examples are original, hypothetical illustrations, not client outcomes, observed multiples or individual valuation advice.
- ICAEW: business and share valuation — assignment and methods
- IVSC: scope of International Valuation Standards
These resources provide background. Linking them does not imply that every engagement is IVS-compliant or endorsed by ICAEW or IVSC. Any professional assignment requires an agreed purpose, scope and intended use.
Put the question to a qualified adviser.
Tell us the decision, valuation purpose and any deadline. We will discuss suitability, information, scope and fees before work begins.
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