A professional business valuation helps companies understand the true economic value of a business and how that value can shape their next move. But how do you get a certified business valuation? Do you hire a CPA, a broker, or use one of those online calculators? How much should you expect to pay? And what documents do you need?
At Griffiths, Dreher & Evans, PS, CPAs, our team of CPA Certified Valuation Analysts (CVAs) combines expertise in tax strategy, investment management, and business sales.
TALK TO A BUSINESS VALUATION PROFESSIONALIn this guide, we’ll walk you step by step through how to get a business valuation, explain the methods professionals use, and share expert advice to help you prepare.
What Is a Business Valuation?
A business valuation is the process of determining the economic value of your business. Put simply, it answers: “What is my company worth in today’s market?”
But it goes beyond knowing the price you could sell for. A proper valuation gives you insight into how your business is performing, what drives its value, and where the risks are. That’s why valuations come up in so many different situations:
- Selling your business
- Bringing in investors
- Adding or buying out a partner
- Tax or insurance purposes
- Estate planning
When you know your business’s value, you gain clarity. You can negotiate with confidence, plan for growth, or identify areas where you might need to strengthen operations. In other words, valuation isn’t just about an exit strategy. It’s a tool for making confident business decisions right now.
3 Business Valuation Methods Professionals Use
Professionals use different approaches depending on the company’s size, industry, and goals. The three primary methods are the asset-based approach, the income approach, and the market approach.
Asset-Based Approach
The asset-based approach starts with a simple equation: total assets minus total liabilities. It considers everything your business owns, including property, equipment, inventory, intellectual property, and cash, and subtracts outstanding debts and obligations.
This method works best for asset-heavy businesses such as manufacturers, trucking companies, or real estate firms, where physical assets make up a significant portion of the value. The limitation, however, is that it overlooks intangibles like customer loyalty, brand recognition, and long-term contracts.
For example, a construction company with $2 million in equipment and $500,000 in debt might be valued at $1.5 million on paper, but if it also holds multi-year client contracts, its true market value could be significantly higher.
Income Approach
The income approach values a business based on its ability to generate future earnings. Using discounted cash flow (DCF) analysis, professionals project the company’s expected profits and adjust them back to their present-day value.
This approach is highly relevant for service-based and growth-oriented companies where profitability and scalability matter more than hard assets. It requires reliable financial statements and realistic forecasting, which means businesses with inconsistent books may struggle to get accurate results.
Take a digital marketing agency, for example. Even if it owns very few assets, its predictable profit growth of $500,000 per year could push its valuation much higher than an asset-based method would suggest.
Market Approach
The market approach is much like valuing a home. It compares your business to similar companies that have recently sold. If three auto repair shops in your area sold for roughly 2.5 to 3 times their annual earnings, a shop with $400,000 in annual EBITDA would likely be valued between $1 million and $1.2 million.
This method is particularly effective in industries with plenty of transaction data, such as restaurants, retail, or professional services. However, it can be less reliable for niche businesses or in volatile markets where sales data is scarce or outdated. That’s why professionals will often use this method alongside the income or asset approach for balance.
In practice, experienced valuation experts rarely rely on just one method. They cross-check numbers and choose the approach that best aligns with the business’s structure and the owner’s goals. For instance, an asset-heavy trucking company may be valued using both asset-based and market approaches, while a fast-growing SaaS company might rely primarily on the income approach with a secondary market comparison for validation.
When Is the Right Time to Sell Your Business?
Like most things in business, timing is everything. Griffiths, Dreher & Evans, PS, CPAs founder, Tom Griffiths, often frames it this way: you can pick your value or you can pick your date, but rarely both. Business values rise and fall just like the stock market, and small companies are often even more volatile than large ones.
If you’re highly dependent on the sale of your business to fund retirement, it’s wiser to focus on value. That means being ready to sell when your company reaches the price point you need to meet your financial goals, even if that’s earlier than planned.
We recommend building a five-year retirement window instead of a fixed date. If your business hits the value you need during that window, take the opportunity and sell. Waiting for the “perfect date” can be far riskier than selling at the right value.
How Much Does a Business Valuation Cost?
The cost of a business valuation can range widely depending on the purpose, the size of your company, and the level of detail required. Our Certified Business Valuation pricing is as follows:
- Up to $3 Million Annual Sales – $2,500
- $3-$10 Million Annual Sales – $3,500
- Over $10 Million Annual Sales – Call
Who Should Perform Your Valuation?
The most qualified individuals to perform a business valuation are those with formal training, credentials, and experience specifically in valuation. The top professionals include:
- Certified Public Accountants (CPAs)
- Certified Valuation Analysts (CVAs)
- Accredited Senior Appraisers (ASA)
Griffiths, Dreher & Evans, PS, CPAs specializes in ‘Main Street’ businesses, supporting small businesses through business valuations, business sales, tax preparation services, and investment advisory services.
All business valuations will be conducted and certified by one of our CPAs who possess either the Accredited Business Valuation (ABV) credential or the Certified Valuation Analyst (CVA) credential.
Our valuations also meet SBA, IRS, and USPAP requirements whenever needed.
With us, you get expert guidance and personalized business valuation services to get the true value of your company.
TALK TO OUR CPA BUSINESS VALUATION ANALYSTS
Frequently Asked Questions
How are intangible assets like brand, patents, or contracts valued?
They’re factored in through earnings and market comparisons. Strong contracts, customer retention, or patents often boost value beyond what hard assets show.
What financial records do I need?
Plan to provide 3–5 years of income statements, balance sheets, and tax returns. Clean, consistent records make your valuation more credible.
How long does the valuation process typically take?
For us, a certified business valuation conducted by our analysts takes 2-3 weeks.
What’s the difference between a calculation of value and a full valuation report?
A calculation of value is a limited estimate, good for planning but not defensible in court. A full valuation report is detailed, follows professional standards, and can stand up with the IRS, banks, or in legal settings.