What Does a Business Appraiser Do? Credentials, Process & Expertise
When facing a major business decision such as preparing for a sale, resolving a partner dispute, or planning your estate, you may be told you need a business appraiser. But what does a business appraiser actually do? How is a company’s value determined? And how do you know whether the professional you’re hiring is truly qualified?
Understanding the role, credentials, and process of a business appraiser helps you make informed decisions about one of your most valuable assets. At Sun Business Valuations, we believe transparency about how valuations are performed builds confidence in both the process and the final conclusion.
The Role of a Business Appraiser
Business appraisers are independent financial professionals who determine the fair market value of privately held companies. Unlike publicly traded businesses, private companies don’t have a quoted market price. Establishing value requires analysis, judgment, and experience.
A professional appraisal goes well beyond reviewing financial statements and applying a formula. Business appraisers evaluate how a company operates, how it earns money, and how risk and opportunity affect future performance. They assess financial results alongside management depth, customer relationships, competitive position, industry conditions, and market dynamics.
Business appraisers are engaged in many situations. Owners preparing for a sale rely on appraisals to set realistic expectations and evaluate offers. In disputes such as shareholder disagreements or divorce, an independent valuation helps parties reach fair resolutions. For estate and gift planning, appraisers provide IRS-compliant valuations that withstand scrutiny. In each case, objectivity and professional judgment are essential.
Credentials That Matter
Credentials are one of the most important factors when selecting a business appraiser. They demonstrate formal training, tested competence, and adherence to professional standards.
Two of the most recognized designations in the profession are the Certified Valuation Analyst (CVA) credential from the National Association of Certified Valuation Analysts and the Accredited Senior Appraiser (ASA) designation from the American Society of Appraisers. Both require significant education, examination, and practical experience.
A Certified Valuation Analyst has completed advanced coursework in valuation theory, financial analysis, and report writing and passed a rigorous multi-hour examination. CVAs are also required to complete continuing education to maintain their certification and stay current with evolving standards.
Credentials matter because valuations are often reviewed by third parties such as the IRS, courts, attorneys, lenders, or buyers. Reports prepared by properly credentialed appraisers carry greater credibility and are far more likely to hold up under scrutiny. An appraisal that lacks recognized credentials may cost less initially, but can create costly problems if challenged.
At Sun Business Valuations, our professionals hold CVA credentials and maintain active involvement in professional valuation organizations to ensure our work meets the highest standards.
When You May Need a Business Appraiser
You may need a professional appraisal if you are:
- Preparing to sell or buy a business
- Resolving a shareholder or partnership dispute
- Planning your estate or gifting business interests
- Establishing or updating a buy-sell agreement
- Seeking financing or investment
Engaging an appraiser early allows time for thorough analysis and informed decision-making.
Choosing the Right Business Appraiser
When selecting an appraiser, look for:
- Recognized credentials such as the CVA
- Experience in your industry
- A clear, fixed-fee pricing structure
- Strong communication and responsiveness
- Independence and lack of conflicts
A reputable appraiser should be willing to answer questions and explain their approach before engagement.
How Business Appraisers Determine Value
While every valuation engagement is unique, professional appraisers follow a structured process designed to produce reliable, defensible results.
Initial Consultation
The process begins with an initial discussion to understand the purpose of the valuation, intended users of the report, and timing considerations. Valuations prepared for transactions, disputes, tax planning, or internal decision-making often require different levels of detail and emphasis.
At Sun Business Valuations, this consultation is provided at no charge and allows us to recommend the appropriate scope and provide a clear, fixed-fee quote.
Data Collection
Once engaged, appraisers gather financial, operational, and industry information. This typically includes several years of financial statements or tax returns, details about operations and ownership, customer and supplier information, and background on the company’s market and competition.
Interviews with owners or management help appraisers understand how the business actually operates, not just how it appears on paper.
Financial Analysis and Normalization
Reported financial statements often include items that don’t reflect ongoing operations. Appraisers analyze and adjust these figures to present the company’s true economic performance.
Common adjustments may include normalizing owner compensation, removing one-time or non-recurring expenses, eliminating personal items run through the business, and adjusting for accounting differences. These decisions require judgment and must be well supported to remain defensible.
Market and Industry Analysis
Valuations are grounded in market reality. Appraisers evaluate economic conditions, industry trends, and comparable company data to understand how similar businesses are valued in the marketplace.
This research helps ensure that conclusions reflect what a knowledgeable buyer would realistically pay under current conditions..
Risk Assessment
Risk is a critical component of value. Appraisers evaluate factors such as management depth, customer concentration, financial stability, competitive position, industry outlook, and regulatory exposure.
When applicable, discounts for lack of control or lack of marketability may be applied to reflect real-world transaction considerations.
Reporting and Review
The final step is a comprehensive written report that explains the analysis, assumptions, and conclusions. A professional report is tailored to the engagement and provides sufficient detail to support the valuation while remaining understandable to non-specialists.
At Sun Business Valuations, we review the report with clients and their advisors to ensure clarity and answer questions, an important step that is often overlooked.
The Expertise Behind the Credentials
Credentials and methodology matter, but experience and judgment are equally important.
Industry Experience. Appraisers who work across a wide range of industries develop insight into what drives value in different business models. Sun Business Valuations has experience in manufacturing, healthcare, professional services, technology, retail, and many other sectors, allowing us to identify industry-specific risks and opportunities.
Communication. A strong valuation is only valuable if it can be understood and explained. Effective appraisers communicate clearly, remain accessible throughout the engagement, and translate complex concepts into practical insight.
The Sun Business Valuations Approach
For more than 20 years, Sun Business Valuations has provided independent, defensible valuations tailored to each client’s situation. Our Certified Valuation Analysts combine deep industry experience with real-world transaction insight and a commitment to clear communication.
We don’t use cookie-cutter templates. Each valuation is customized to its purpose, supported by sound methodology, and explained in plain language. Our reports are thorough, practical, and designed to stand up to scrutiny.
With transparent pricing, turnaround times of 10–15 business days, and a no-charge initial consultation, we make professional valuation services accessible to businesses of all sizes.
Common Misconceptions About Business Appraisers
All appraisers reach the same value. While qualified appraisers should reach reasonably similar conclusions, differences in assumptions, judgment, and analysis can materially affect results.
Valuation is just plugging numbers into a formula. Valuation involves professional judgment and careful consideration of company-specific factors. Template-driven approaches often miss important details.
An appraiser can be told what value to reach. Ethical appraisers are independent. Conclusions are based on analysis, not client preference, and must withstand third-party review.
The most expensive appraiser is always the best. Cost alone is not a measure of quality. Credentials, experience, communication, and reputation are far more important.
Ready to Get Started?
If you’re preparing for a transaction, resolving a dispute, or planning ahead, Sun Business Valuations can help you understand your company’s value with clarity and confidence.
To discuss your situation, timeline, and cost, call Stephen Goldberg, Managing Partner, at 800.232.0180, or complete our contact form to schedule your no-charge consultation.
Sun Business Valuations provides professional business appraisal services nationwide, delivering accurate, defensible valuations across a wide range of industries.