Frequently Asked Questions
At Peak Business Valuation, we provide business valuations to serve a wide range of client needs. Below, we answer several of the most frequently asked questions about our services. If you have any additional questions or need a professional business valuation, reach out to Peak Business Valuation today!
What is a business valuation?
Business valuation is the formal process of determining a business’s economic value. This involves analyzing a company’s financial performance, industry trends, and market data to arrive at a reliable value estimate.
Business valuations are conducted by professionals with experience and credentials in appraisal methodology and valuation standards. For guidance on choosing a business appraiser, check out Finding a Business Appraiser.
Why get a business valuation?
A business valuation provides critical information for strategic decision-making in various scenarios. It helps business owners understand their company’s fair market value, strengths, weaknesses, risks, growth opportunities, and more.
Below, we highlight several common reasons to receive a business valuation:
- Preparing to Buy, Grow, or Sell a Business: A professional business valuation provides a clear picture of a company’s value, guiding informed decisions for acquisitions, scaling, or setting a realistic asking price.
- Applying for SBA Loans or Other Financing Options: Lenders often require a business valuation to assess risk and determine appropriate loan amounts based on the company’s current market value.
- Navigating Partner Buyouts or Disputes: Business valuations ensure equitable solutions by objectively determining a partner’s share. This helps reduce conflict and simplify the buyout or resolution processes.
- Estate and Gift Tax Planning: An accurate business valuation helps calculate tax liabilities and supports compliant wealth transfers during estate or succession planning.
- Settling Divorce or Legal Proceedings: Obtaining a business valuation promotes an equitable division of assets and provides reliable evidence in divorce or other legal proceedings.
- Building Strategic Business Plans: Understanding your business’s current value, strengths, and weaknesses is essential when strategizing for future growth and long-term success.
For more insight, check out 6 Reasons to Obtain a Business Valuation.
What is Peak Business Valuation’s turnaround time for a valuation report?
The average turnaround time for a business valuation report is 5–10 business days. However, turnaround time can vary depending on the purpose of the valuation. For example, SBA business valuations may follow stricter deadlines, while estate planning engagements may allow more flexibility.
On average, Peak Business Valuation delivers high-quality business valuations 2x faster than most firms. This is due to efficient systems and a dedicated team with decades of experience.
Do you offer expedited or rush services?
Yes. For clients who need a faster turnaround, we offer rush valuation services with a 3–5 business day delivery window–available for an additional fee.
What is the cost of a business valuation report?
Professional business valuations can range from $2,000 – $8,000+. However, the cost of a business valuation depends on several factors, including:
- The purpose of the valuation (e.g., financing, sale, tax reporting)
- The complexity and size of the business
- The level of detail required in the analysis
Read How Much is a Business Appraisal? for additional information.
It is important to note that an experienced, reputable business appraisal is well worth the price. With 600+ five-star reviews, Peak Business Valuation is the top-rated business appraisal firm in the country. You can schedule a consultation with Peak Business Valuation to discuss your needs and get a free quote by clicking the button below!
What level of detail is included in a valuation report?
Peak Business Valuation offers two types of valuation reports. Each report offers varying levels of depth tailored to different use cases.
1.) Complete Appraisal – Summary Report
Complete appraisals provide a detailed and in-depth analysis of your company. They are especially useful in formal settings. This report includes company background, industry outlook, and economic overview. A complete appraisal also includes a financial analysis and projection, as well as the valuation methodologies used. See Business Valuation Report Made Simple for more information.
2.) Calculation of Value Report
The calculation value report provides a value estimate using limited, simplified procedures. This report is more informal compared to the complete appraisal and can be used in scenarios where a full report is not required. If you have any questions, refer to Comprehensive Business Valuation vs. Calculation Report.
How do you value a small business?
As part of the valuation process, Peak Business Valuation uses three primary valuation approaches:
The Market Approach
The market approach compares your business to similar companies that have recently sold. Similar to pricing a home, we assess what comparable businesses are worth in the current market. This involves applying market multiples to get an accurate fair market value estimate.
The Income Approach
This method analyzes the company’s ability to generate future cash flow. Strong, predictable cash flow is associated with higher valuations. Read The Income Approach Made Simple for more information.
The Asset Approach
The asset approach estimates value based on the company’s assets minus liabilities. While this method is used less frequently, it is common in asset-heavy businesses such as manufacturing or R&D-intensive operations.
Check out How to Value a Small Business for more guidance.
What documents are needed for a valuation?
The required documentation varies depending on the business and the purpose of the valuation. Some commonly requested items include:
- Three to five years of financial statements and tax returns
- Year-to-date financials
- Owner compensation details
- Organizational chart or ownership breakdown
For a more complete list, check out Documents Needed for a Business Valuation.
Peak Business Valuation can determine the specific requirements of your business valuation during a free consultation.
Still Have Questions?
Contact Peak Business Valuation today to schedule your free consultation. We’re happy to address any questions to prepare you for the valuation process!
