Choosing the Right Business Valuator
Your due diligence checklist for selecting a qualified professional who will deliver accurate, defensible valuations that meet your specific needs.
Why This is One of Your Most Important Hires
Choosing a business valuator isn't like hiring a typical consultant. The conclusion of value can have a significant financial impact on a transaction, a legal dispute, or your tax liability.
A defensible, credible valuation provides leverage and protection; a weak one creates risk. Using a rigorous selection process is the best way to ensure a credible outcome.
Rationale: This frames the decision as a high-stakes, strategic choice, justifying the need for the due diligence you're about to outline.
Your Due Diligence Checklist
A business valuation is not a regulated industry in the same way as law or accounting. Therefore, professional credentials are the single most important indicator of a valuator's competence and ethical commitments. Look for one of the following:
CVA (Certified Valuation Analyst)
A credential focused specifically on business valuation for private companies, requiring rigorous testing, peer review, and adherence to the standards of the National Association of Certified Valuators and Analysts (NACVA).
- • Comprehensive 5-day training program
- • Written examination requirement
- • Business experience prerequisite
- • Ongoing education requirements
- • Practical valuation focus
ABV (Accredited in Business Valuation)
A credential for CPAs who specialize in valuation, governed by the AICPA.
- • Must be licensed CPA
- • Minimum 150 hours valuation experience
- • Rigorous written examination
- • Annual continuing education
- • Strong accounting background
ASA (Accredited Senior Appraiser)
A credential from the American Society of Appraisers, covering various disciplines including business valuation.
- • 5+ years experience requirement
- • Comprehensive written and oral exams
- • Continuing education mandatory
- • Peer review of sample reports
- • Strong court and IRS recognition
The Key Takeaway
The specific letters are less important than what they represent: a formal commitment to established professional standards, a strict code of ethics, and ongoing education. Never hire a valuator without a recognized credential.
Rationale: This is the perfect way to handle this. You define the CVA clearly while showing respect for other major credentials. You frame the choice as being about professionalism itself, which a CVA clearly embodies.
A credential is the foundation, but experience is what builds the house. Ask specific questions:
Industry Experience
"Have you valued businesses in our industry before?"
- • Understanding of industry multiples
- • Knowledge of key performance indicators
- • Familiarity with industry risk factors
- • Access to relevant transaction databases
Purpose Experience
"What is your experience with valuations for our specific purpose (e.g., divorce, transaction, ESOP)?"
- • Litigation support experience
- • Tax and compliance knowledge
- • Transaction support expertise
- • Regulatory understanding
Work Product Quality
"Can you provide a redacted sample report so I can see the quality of your work product?"
- • Report structure and clarity
- • Analysis depth and methodology
- • Professional presentation
- • Compliance with standards
Rationale: These questions empower the client and subtly showcase that you are prepared to answer them confidently.
A valuator's conclusion must be objective and unbiased. Their sole duty is to the valuation itself, not to a specific outcome.
Red Flags to Avoid
- Anyone who asks, "What number do you need?"
- Suggestions that fees could be a percentage of the valuation
- Previous business relationships with parties
- Unwillingness to testify or defend their work
What to Look For
- Complete independence from all parties
- Fixed fee or hourly rate structure
- Willingness to testify if needed
- Professional liability insurance
Rationale: This is a direct appeal to NACVA's code of ethics. It protects the client from unscrupulous actors and positions your firm as ethical and trustworthy.
Ready to Conduct Your Due Diligence?
We welcome the opportunity to earn your trust and encourage you to put our firm through this exact checklist.
Schedule a confidential consultation to discuss your specific situation, learn about our qualifications and experience, and determine if we are the right fit for your needs.
Rationale: This call-to-action is brilliant because it's not a sales pitch. It's an invitation for them to perform their due diligence on you. It shows supreme confidence and professionalism, making you the obvious and safest choice.
Ready to Move from Learning to Action?
Put your knowledge to work with professional business valuation services tailored to your specific needs.