The SME Finance Forum recently interviewed Michael M. Carter, the CEO and President of BizEquity, the first patented and leading online business valuation service. BizEquity was created to democratize and provide better access to business financial knowledge for the Global 200 million SMEs.

Why did you decide to provide a business valuation tool for small businesses? How are businesses using the information they obtain from the BizEquity tool?

Carter: This is my 3rd software startup.  In between my last company Dashboard Systems I did some VC work as a partner with the founding investor behind Comcast; QVC; and Novell, the legendary Warren V. "Pete Musser.  I noticed over the course of over 150 meetings that the most important question, regardless of who it was, no entrepreneur was sure of and could not answer, that question was "What is your business worth?"

I sought to create the largest provider of business valuation knowledge online with our service at BizEquity.  Now I can say we have valued over 13 million businesses.  Businesses use our service when they are thinking about selling, looking to raise capital, and or looking to understand their value so that they can better perform.  In a sense we equal the playing field by helping the business owner know what they are worth.

What is your revenue model and how do you set yourself apart from competitors?

Carter: We make the initial estimate free online for any user off of BizEquity.com.  In order however to purchase a proper report they business owner or advisor must pay $365.00 for a customized 23 page business report with 4 valuation figures.  We have chosen to really focus on the channel of advisors to the Business owner as our core go to market strategy. 

Given that you have data on thousands of businesses, what kind of broad conclusions can you draw about the SME growth patterns in the US?

Carter: We now are proud to say we have valued millions of businesses.  What we can say is that business valuations do not correlate to the stock market, but rather correlate closer to GDP growth and the growth of core financial metrics for the business such as, Revenue and Income growth. We can also say that 75% of business owners don't know what they are worth and 6/10 times the business is worth more than they think.  We can also say that 50% of all businesses are underinsured as well.  So in a sense the most important question any business owner can answer is what is their business worth so that they can better protect themselves.  

Do you plan to expand to emerging economies in the near future? If so, what are some of the challenges you anticipate?

Carter: Absolutely!  Business Valuation is a global issue and opportunity.  We look to expand to Asia by Q3 2014.  The challenges will be finding reliable secondary data sources to support our core valuation comparables and market metrics.