Frequently Asked Questions

How should a business appraiser be selected?
A business appraiser should be selected based on credentials and experience. The small list of top-level credentials includes ASA and CFA. Top credentials should be accompanied by experience in many types of businesses. Experience cannot be gained by taking courses and passing written exams. Knowledge that comes from appraising many types of businesses in different situations provides a business appraiser with the ability to cut through unnecessary clutter and focus on issues that matter most.

An industry expert is not necessarily a business valuation expert. Appraising business interests is a complex profession that requires knowledge in a variety of financial and market areas. An industry specialist may not have the necessary range of knowledge to complete a sustainable business valuation.

How much does a business appraisal cost?
Because each situation is unique, it is impossible to know in advance the exact cost for a "typical" appraisal. Generally speaking, since smaller businesses tend be less complex and require less time to appraise, the cost of an appraisal is usually lower. Some small businesses can be appraised by qualified experts for fees beginning around $6,000. Larger or complex cases can exceed $25,000. We develop the estimated cost of each case after discussing the details with the client and learning about the scope of a project.

How can the cost of a business appraisal be kept to a minimum?
The best way to hold down appraisal costs is to provide the appraiser with all requested information as quickly and completely as possible. When information and documents "trickle in" over weeks and months, work may have to be repeated. Clients can minimize the cost and time to completion by providing a complete package of information early in the process, and assuring that all parties involved (business manager, accountant, attorney, etc.) respond quickly to follow up requests.

How long does it take to complete a business appraisal?
Generally, from the time that all of the requested information is received by the appraiser, a project can usually be completed in five to six weeks. During this time the appraiser interviews management, visits the business site, and analyzes the economy and industry. During certain busy times of the year, the process can take longer.

Can business appraisals be used in an arbitration or mediation?
Yes, in many cases a written report from an unbiased third-party expert will satisfy both sides in a dispute. This may eliminate or dramatically reduce litigation expense. In such a scenario, both parties may want to agree on and stipulate to a particular expert. We have been jointly retained in many cases.

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