At some point most business owners will need to find out how much their business is worth. They will be faced with task of finding someone to perform a business appraisal or valuation. In such unfamiliar territory owners often don’t know where to start.
Types of Business Valuation Professionals
They are a number of professions that offer business valuation services. In most areas there is no specific regulation of this profession. Business valuation services are not usually a primary source of revenue, so locating business valuation professionals can be difficult. Here are some types of professionals that commonly offer business valuation (BV) services.
1. CPAs – Many CPAs offer BV services in addition to their normal accounting, auditing, and tax work. CPAs often have a combination of business, accounting, finance, and tax knowledge that is well suited for valuing businesses.
2. Financial Consultants (non-CPA) – Financial consultants have varying levels of expertise so their backgrounds should be checked carefully.
3. Business Brokers – Brokers normally stick to valuing businesses they have listed for sale. They tend to rely on ‘quick and dirty’ methods that work well for determining asking prices, and are not intended to be formal valuations.
4. Commercial Real Estate Brokers/Agents – Commercial real estate professionals sometimes value businesses they list for sale. They are good at appraising real estate, but typically lack skills and experience to properly value intangible assets like goodwill.
No one type of BV professional is inherently better than another. Examine each professional’s qualifications carefully.
Business Valuation Credentials
There are four major organizations that offer business valuation certifications. Each certification has unique prerequisites and renewal provisions. They all require membership in granting organization.
1. The American Institute of CPAs (AICPA) grants Accredited in Business Valuation (ABV) credential that requires being a CPA, passing an exam, and BV education and experience. Their online ABV directory can be accessed at www.aicpa.org/accredrefweb/abvsearch.asp
2. The American Society of Appraisers offers Accredited Member (AM) and Accredited Senior Appraiser (ASA) designations that require passing exams, and BV education and experience. Their online member directory can be accessed at www.bvappraisers.org/find/.
3. The National Association of Certified Valuation Analysts (NACVA) offers several designations including Certified Valuation Analyst (CVA) that require passing an exam and BV education. Their online member directory can be accessed at www.nacva.com/US_guide/US_guide.html.