Top Questions Owners Ask About Business Valuation Services (With Expert Answers)

When business owners start exploring the idea of a valuation, the same set of questions always comes up: What’s my company worth? How do you figure it out? How long will it take—and what will it cost?

At Sun Business Valuations, we’ve completed thousands of valuations across industries and purposes, from mergers and acquisitions to shareholder disputes and estate planning. Below, our experts answer the most common questions we hear, so you can move forward with clarity and confidence.

1. What exactly is a business valuation, and why would I need one?

A business valuation is a formal, independent assessment of your company’s economic value. It’s more than just a number—it’s a roadmap for decision-making.

Common reasons owners seek business valuations include:

Exit or succession planning – determining fair market value when selling your business or passing it on.
Mergers and acquisitions – providing an objective value in negotiations.
Shareholder or partner disputes – settling conflicts with defensible numbers.
Divorce or estate planning – ensuring fair distribution of assets.
Tax and compliance – meeting IRS or legal requirements.

Understanding your true value provides clarity, whether you’re preparing for growth, resolving a dispute, or planning for the future.

2. How is the value of my business determined?

Business appraisers use three main approaches:

Income Approach: Projects future cash flows and discounts them to their present value. Often used when the business is expected to continue generating steady profits.
Market Approach: Compares your business to similar companies that have recently sold. This method is common in M&A and industry benchmarking.
Asset-Based Approach: Looks at the value of assets minus liabilities. More common for holding companies, asset-intensive firms, or businesses facing liquidation.

The right method, or combination of methods, depends on your industry, stage of business, and the purpose of the valuation. An experienced business valuation firm like Sun can help you determine which approach is most suitable for your situation.

3. How long does a business valuation take?

Most business valuations are completed in 2–4 weeks. The timeline depends on:

The complexity of your financials and ownership structure
How quickly you provide the necessary documentation
The scope of the valuation (limited scope vs. full, in-depth report)

For transactions with tight deadlines, expedited services may be available. The key is to start early, especially if the valuation is needed for tax filings, litigation, or closing a deal.

At Sun Business Valuations, we dedicate our resources to providing a completed valuation within 10 to 15 business days of receiving the requisite information.

4. What documents do I need to provide?

To prepare a defensible business valuation, you’ll typically need:

3–5 years of tax returns or corporate financial statements (income statements and balance sheets)
Ownership agreements (partnership or shareholder agreements)
Forecasts or projections, if available
Details on major contracts, customers, or suppliers

The more complete and accurate the information, the smoother the valuation process will be.

5. How much does a business valuation cost?

The cost of a valuation varies depending on:

Business size and complexity
Purpose (IRS compliance vs. M&A vs. dispute resolution)
Industry dynamics
Scope of work (calculation vs. full valuation report)

While some online “valuation calculators” promise instant results, they often miss critical factors. Investing in a professional business appraisal prepared by a certified business valuation expert is worthwhile because it can protect you from costly disputes or undervaluing your company in negotiations.

6. How often should my business be valued?

There’s no one-size-fits-all answer, but the best practice is:

Every 1–3 years for privately held companies, especially if you’re preparing for growth, financing, or succession.
When a major event occurs, such as adding or removing a partner, planning an exit, divorce, litigation, or estate transfer.

Think of valuation as part of your overall financial strategy, not just a one-time exercise.

7. What’s the difference between a business valuation and a business appraisal?

The terms are often used interchangeably, but there can be nuance:

Business Valuation – broader, often associated with financial, legal, or strategic purposes.
Business Appraisal – sometimes used in IRS or court contexts, emphasizing defensibility and compliance.

Both aim to establish fair value, but “appraisal” is often used when referring to certified, court-defensible work. Sun Business Valuations provides both, depending on client needs.

8. Who is qualified to perform a business valuation?

Not every accountant or consultant is equipped to provide a defensible business valuation. Look for professionals with recognized credentials, such as:

CVA (Certified Valuation Analyst by National Association of Certified Valuation Analysts)
ASA (Accredited Senior Appraiser by American Society of Appraisers)
ABV (Accredition in Business Valuation by the American Institute of Certified Public Accountants)

These designations signal expertise in valuation standards, financial analysis, and professional ethics. Sun’s team includes credentialed experts who have completed thousands of valuations.

9. Can a valuation help me increase my company’s value?

Yes. While valuations are designed to determine value today, they often reveal insights into how you can grow tomorrow.

Valuation reports can highlight:

Areas where profit margins lag industry benchmarks
Opportunities to improve working capital
Risks related to customer concentration or weak contracts
Factors that make your business more attractive to buyers or investors

By addressing these issues, owners can often increase the future value of their business ahead of a sale or succession.

10. Will my valuation hold up in court, with the IRS, or in a dispute?

It depends on the firm you hire. A valuation prepared by qualified experts using a proper methodology is defensible in court, during IRS reviews, and in arbitration.

At Sun, our professionals are experienced expert witnesses and familiar with IRS standards, ensuring your valuation can withstand scrutiny in:

Tax audits
Divorce and shareholder disputes
Litigation and arbitration

This is why it’s critical to work with a valuation firm that has the right credentials and courtroom experience.

Moving Forward With Confidence

Getting your business valued is one of the smartest decisions you can make as an owner. It provides clarity for planning, strengthens your negotiating position, and ensures compliance when it matters most.

At Sun Business Valuations, our certified experts bring deep experience across industries, purposes, and legal settings. Whether you’re preparing for a sale, resolving a dispute, or planning for the future, we’ll help you uncover the true value of your business—with confidence.