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Value and Worth – by Jo Haigh

Jo Haigh

Jo Haigh

For insurance purposes I recently had some family jewellery valued. Some of these items belonged to my grandmother and, although somewhat old fashioned, were technically fine pieces containing some precious stones diamonds and made of 22ct gold. Because of their settings however the actual items I was informed had probably more value if broken up for their parts.

I of course had no intention of selling them, they are after all heirlooms which I propose to pass to my daughters, but what struck me was that the value is irrelevant. It was so much more than the pounds sterling I could have exchanged the items for but rather the history behind them that was so important.

They were my grandmothers then my mother’s items, I had never worn them and it seems unlikely I ever will but they had and perhaps my children may do so in the future.
When valuing a business a simple mathematical formula is applied (well not always simple but never the less a formula) but is multiple of profits, net assets calculation or discounted cash flow and does not take into account the difference between that value and worth.

As with my family jewels however worth is very personal, precious to me beyond cash value because of their historical links. To a third, unrelated party this link is meaningless…or is it? Of course that third party may be an ardent collector of “Art Deco” or “Victoriana” jewellery in which case the worth, although not based on the same premise as my own, may well be more than someone who is not such a collector. Add to this the fact that there is another collector desperate for the same items and the worth is starting to go up, sometimes exponentially.

When considering your target market for the sale of your business, therefore finding the right buyer, is not simply a question of looking at a competitor but thinking way outside of that box, or any other box for that matter. Think laterally; your product into a different market or vice versa or new entrants, who could see your business as a quick route to their destination. Line up competing bids and make all parties aware that they are not the only bidder; no one wants something more if they believe someone else might get it. Think internationally; many of my buyers in the last 12 months have come from the USA and Europe, including Eastern Europe. These are not always easy markets for cultural and momentary reasons but they are open for business and you can’t afford to overlook them. Do so at your peril.


Jo Haigh is head of FDS corporate finance services and the author of The Financial Times Guide to Finance for Non Financial Managers. You can reach her at


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