It may be surprising that there are no restrictions to practice business valuation in most states. As a result, you will need to follow the “buyer beware” rule and do your homework. Through your research you may find that there are many companies and people – and even websites – advertising business valuation services. However, there are far fewer legitimate business valuation professionals who possess the knowledge and judgment required to meet your needs.
There is a lot to consider when selecting a business valuation professional. For example, does the professional have business valuation credentials? What percentage of their time is spent practicing business valuation? How many valuation reports do they prepare each year? Do they adhere to professional business valuation standards? Do they meet the requirements to be a “Qualified Appraiser” as defined by the Internal Revenue Service and Small Business Administration?
Credentials are good indicators of knowledge, skill, experience, training, and education. The following are a few of the widely respected credentials to look for when selecting a business valuation professional:
CPA – Certified Public Accountant (issued by state governments)
ABV – Accredited in Business Valuation (American Institute of CPAs)
CFF – Certified in Financial Forensics (Certified in Financial Forensics)
ASA – Accredited Senior Appraiser (American Society of Appraisers)
CBA – Certified Business Appraiser (Institute of Business Appraisers)
Most business valuation credentials require applicants to do the following:
- Have a college degree and/or CPA license
- Pass exam(s)
- Obtain certain hours/years of experience
- Submit a valuation report to be peer reviewed
- Continue their education and learning
Depending on the reason for your valuation needs, you may also want to ask if the professional has ever had a valuation challenged by the Internal Revenue Service and, if so, what the outcome was. You might also need to know if they have testified in court as an expert in business valuation.
The professionals at Pacific Business Valuation have the necessary credentials, experience, and qualifications. We would be happy to speak with you regarding your specific valuation needs. Please feel free to contact us.