Business Appraisals: What They Are, Who Does Them, and How to Get One 

Business appraisals are the foundation of some of the most consequential decisions a business owner will ever make, yet most owners have never had one done. Whether you are preparing to sell, navigating a legal matter, planning your estate, or simply want to understand what your company is worth, a professional business appraisal gives you an objective, defensible answer built on financial analysis, market data, and recognized methodology.

At Sun Business Valuations, our certified business appraisers have completed thousands of business appraisals across virtually every industry and for every purpose. This page covers everything you need to know: what business appraisals are, what business appraisers do, when you need one, and how to choose the right appraiser for your situation.

What Are Business Appraisals?

A business appraisal is a professional determination of the fair market value of a business: the estimated price a willing buyer would pay to a willing seller in an arm’s-length transaction, with both parties having reasonable knowledge of the relevant facts and neither being under compulsion to complete the deal.

Business appraisals are conducted for a wide range of purposes, each of which may influence the methodology used, the standard of value applied, and the level of documentation required. A business appraisal for estate tax purposes, for example, must conform to IRS Revenue Ruling 59-60 and be prepared by a qualified appraiser. A business appraisal for a shareholder buyout needs to be defensible to all parties. A business appraisal for an SBA loan must meet the requirements of SBA SOP 50 10 8.

What Do Business Appraisers Do?

A business appraiser is a trained, credentialed professional who determines the fair market value of a business through a structured analytical process. Unlike accountants who prepare financial statements or brokers who estimate listing prices, a certified business appraiser applies recognized valuation methodologies, conforms to professional standards, and produces a documented report that can withstand scrutiny from the IRS, courts, lenders, and other parties.

Here is what a business appraiser does in a typical engagement:

Reviews and recasts financial statements

A business appraiser obtains three to five years of financial statements or tax returns and recasts them to reflect the business’s true economic earnings, normalizing for owner compensation, personal expenses, one-time items, and nonrecurring revenues. This recasting process is one of the most important steps in any business appraisal and requires both financial expertise and professional judgment.

Conducts an operational and qualitative assessment

Financial statements capture what happened. A business appraiser goes deeper, interviewing owners to understand the factors that drive and constrain value: management depth, customer concentration, vendor dependence, competitive position, growth trajectory, and the extent to which the business’s value depends on the owners personally versus the business itself.

Applies multiple valuation methodologies

A credible business appraisal considers multiple approaches: income-based methods that value the business based on its ability to generate future earnings, market-based methods that compare the business to similar companies that have been sold, and asset-based methods that value the business’s underlying assets. Most business appraisals consider three to six methodologies, weighted based on the specifics of the company and the purpose of the engagement.

Researches industry and market data

A certified business appraiser has access to professional databases of completed transactions, industry valuation multiples, economic data, and risk benchmarks that are not publicly available. This data grounds the appraisal in current market reality rather than theoretical models.

Prepares a documented, standards-compliant report

The output of a business appraisal is a thorough written report that presents the methodologies applied, the analysis conducted, the assumptions made, and the value conclusion, along with a full explanation of the reasoning behind it. A certified business appraiser’s report is prepared in accordance with the professional standards of their credentialing organization and is written to be understood by non-specialists while meeting the technical requirements of the most demanding professional forums.

Reviews findings with clients and advisors

A quality business appraiser does not simply deliver a report and move on. They review the findings with you and your advisors in detail, explain the conclusions, answer questions, and ensure the report fully serves its intended purpose. At Sun Business Valuations, this review is included in every engagement, as is ongoing support for questions from attorneys, CPAs, and lenders after delivery.

Business Appraisal vs. Business Valuation: Is There a Difference?

This is one of the most common questions we receive, and the honest answer is: in most contexts, no. In professional practice, the terms business appraisal and business valuation are used interchangeably. Both refer to the same analytical process: a systematic, standards-based determination of a business’s value. Some practitioners use ‘appraisal’ more specifically in tax and legal contexts and ‘valuation’ more broadly, but the underlying methodology and the credentials required are the same.

At Sun Business Valuations, we use both terms because our clients do. Whether you call it a business appraisal or a business valuation, what you receive is the same: a certified determination of your company’s fair market value prepared by accredited professionals.

When You Need a Business Appraisal

Business appraisals are required, or strongly recommended, in the following situations.

Business Sales & Exit Planning

A business appraisal establishes a credible asking price before you go to market. Without one, you are negotiating blind: either leaving money on the table or pricing yourself out of a deal.

Estate & Gift Tax Planning

The IRS requires a qualified appraisal from a qualified appraiser for business interests transferred as part of an estate or as a gift. An inaccurate or uncertified appraisal can result in penalties, audits, and back taxes.

Divorce & Marital Settlements

When a business is a marital asset, divorce proceedings require an accurate, independent business appraisal for equitable distribution. Courts expect certified, defensible appraisals from qualified expert witnesses

Shareholder Buyouts & Disputes

A certified business appraisal gives all parties in a buyout or dispute a shared, objective basis for negotiation, replacing conflict with clarity and reducing the risk of costly litigation.

Bank Financing & SBA Loans

SBA SOP 50 10 8 requires an independent business appraisal from a qualified source when the amount financed exceeds certain thresholds. Our certified reports are accepted by banks, the SBA, and other lending institutions nationwide.

Buy-Sell Agreements

A buy-sell agreement without a clear valuation mechanism is a blueprint for conflict. A business appraisal establishes the credible framework needed for a buy-sell agreement to function as intended.

Corporate Litigation

Business appraisals are frequently required in legal disputes. Our certified appraisers provide expert witness testimony and litigation support in breach-of-contract, shareholder oppression, and damages matters.

Succession Planning

Understanding what your business is worth today is the essential starting point for any succession plan, whether you are transferring to family, a key employee, or an outside buyer.

How to Choose the Right Business Appraiser

The firm you choose for your business appraisal affects not just the number in the report. It affects whether that number holds up when it matters most. Here are the most important factors to evaluate.

• Certification and accreditation: confirm the appraiser holds CVA, ASA, or ABV credentials specifically. CPA licensure alone is not sufficient.
• Understanding of your specific purpose: a business appraisal for estate planning has different requirements than one for litigation. The right appraiser asks about your objective before proposing an approach.
• Multiple methodologies: credible business appraisals use three to six methods. A firm relying on a single methodology or a rule of thumb is not performing a certified appraisal.
• Fixed-fee pricing: a qualified appraiser with sufficient experience should provide a fixed-fee quote before the engagement begins. Open-ended retainer arrangements favor the appraiser, not the client.
• Turnaround time: the industry norm is several months; a well-resourced firm should deliver within 10 to 15 business days.
• Report review and post-delivery support: the appraiser should be available to walk through the completed report with you and your advisors, and be available for follow-up questions from attorneys, CPAs, and lenders.
• Defensibility and expert witness capability: for legal and tax matters, confirm the appraiser is prepared to stand behind their conclusions and provide expert witness testimony if needed.

What to Expect From the Business Appraisal Process 

If you have never had a business appraisal done before, here is a straightforward overview of what the process involves from first contact to final report.

Free Consultation and Fixed-Fee Quote

Every Sun Business Valuations engagement begins with a complimentary consultation. We discuss your business, the purpose of the appraisal, and your timeline. By the end of the call, you will receive a fixed-fee quote covering the entire engagement. No retainers, no hourly billing, no surprises.

Document Collection

We provide a clear, organized list of the financial documents we need, typically three to five years of financial statements or corporate tax returns, interim financials, and basic operational information. You will be introduced to your onboarding coordinator, who is available to answer questions throughout the process and will guide you on uploading your documents through our secure portal.

Intake Interview with a Senior Appraiser

A senior certified appraiser conducts a detailed interview to understand the qualitative factors that financial statements cannot capture: your management team, customer relationships, competitive position, and growth trajectory. This is where your business appraisal becomes genuinely customized to your company.

Analysis, Methodology Selection, and Report Preparation

Our team recasts financial statements, researches industry and market data, applies multiple valuation methodologies, and prepares a standards-compliant business appraisal report. Most engagements are completed within 10 to 15 business days of receiving the required documents and having your intake call.

Report Delivery

We deliver a thorough, well-supported report that is typically final as issued. We also invite you and your advisors to schedule a call to review and discuss the findings, and we will update the report as needed. This collaborative review ensures every conclusion is clear, every question is answered, and the appraisal fully serves its intended purpose. Post-delivery support is included in the engagement fee. 

Get Your Business Appraisal Started Today

Whether you need a business appraisal for a sale, a legal matter, a tax filing, or simply to understand what your company is worth, Sun Business Valuations is ready to help. Our certified business appraisers bring over 30 years of experience, dual CVA and ASA accreditation, and a fixed-fee approach, so you always know what to expect.

The first step is a free, no-obligation consultation. In a single conversation, you will understand the process, timeline, and cost, and see exactly how Sun Business Valuations approaches your specific situation. Call Stephen Goldberg, Managing Partner, at 800.232.0180, or complete this form to learn more about our process, time frame, and cost.

Sun Business Valuations provides professional business valuation services throughout the United States. Our certified experts deliver accurate, defensible valuations for businesses of all sizes across diverse industries.