Every seller should have a third party conduct a realistic estimate of the business’ worth. Formal appraisals carry considerable weight, but even a less formal estimate of value can help to set price and support your equity in intangible assets.

In order to have any validity, estimates and appraisals should always be done for a fee. Offering formal valuations in consideration for future work is against the ethical guidelines of all certification bodies. There are three accepted methodologies for estimating the worth of a company, and one fully accurate method.

Estimating methods:

Appraisals:
Frequently required by banks and courts, appraisals are comprehensive examinations of a company’s value. Appraisals are customarily used in litigation, and require careful documentation. We recommend that you always use a certified appraiser (ASA, CVA) with experience in your industry for a full appraisal.

Appraisal fees start at about $5,000, and may range into the six figures.

MPN conducts independent Value Estimates for Sellers, Owners and Investors