The Rain In Spain...or Scotland...or ...

Certain cultures have their own, often colorful vocabularies and some even have their own "specialties." For example:

• The Inuit people have 50+ words for "snow".
• In Arabic, there are more than a dozen words that express "love."
• There are at least 60 ways to say "fishing net" in Hawaiian,

?and the winner and still champ...

• ?In Scotland, they have more than 100 ways to say "rain" (I've been there; they need them all)

Similarly, in my business, there are myriad ways to express "value." There's "fair market value," at least a couple versions of "fair value" and the different states and agencies (like the IRS) have different interpretations of what those words mean...and here's the capper...these measures of value don't actually exist in the real world.

?"Fair market value" sounds like a nice concept. I mean, we all like "fair" don't we? And it should be some kind of "market-based analysis" right? Well, it's not.

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OK, since we're on the subject, there's also "investment value" (more realistic), "liquidation value" (usually after bad stuff happens), etc. etc...and it can all be different depending on the circumstances. Yeah, it gets complicated.

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It really gets frothy when legal documents, like operating agreements or buy-sell agreements say "value" or "fair market value" or something else that is wide open to interpretation.

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Let's say you're a shareholder that is being bought out, You'd say that "value" should be a high number and if you're the person paying, "value" should be a low number. This kind of wonky wording literally initiates the knock-down, drag-out fights that the document was meant to prevent.

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Generally, I get called in when people want to buy stuff, sell stuff, or argue over stuff.

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I handle most of these different "flavors" of value but the projects I like involve a transactional approach to value.

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So it's when an owner wants to know "what would an actual person pay in actual money for this business?" It can be for a proposed deal or as part of a strategic plan where you need to know what the business is worth in real dollars and cents. That's different from a theoretical analysis and it's usually a lot more fun (at least for me). It helps that I've always been a "deal person" so I know how buyers look at stuff.

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And let's not forget about the "human factors" (oh boy, this is where it gets interesting).

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Call it greed, pride, envy, anger or any of the other "seven deadlies" plus SPITE!?

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Spite shows up in deals, deeds, and duels. Personally, I think it's why Jack sold the family cow for magic beans in the first place.

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I've seen spite in M&A deals, business divorce, litigations, estates (OH! Like you wouldn't believe). Wherever humans face off against each other, spite is hiding in the corner of the room (behind the elephant). I've seen it from siblings, partners, colleagues, and even once from a grandmother (No, I'm not kidding, she was as mean as a snake).

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Just as you can pretty much count on rain showing up in Scotland, ambiguity definitely blows in on the wind in valuation. Get yourself a good umbrella.

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And now for some words of wisdom from people who aren't me:

• ?"Conversation about the weather is the last refuge of the unimaginative." - Oscar Wilde
• ?"Price is what you pay; value is what you get." - Warren Buffet
• ?"On the road from the City of Skepticism, I had to pass through the Valley of Ambiguity." - Adam Smith

Be well and stay humble and kind.

TC