When you're considering having a business appraised, it's quite often only something you have done once in a very great while. In fact, many business owners choose to only have their business value determined during the sale of a business. Unfortunately, that means that many business owners aren't quite sure what they should look for when hiring a business valuation expert. What should you look for in a business appraiser? Here's a quick look to help get you started.
What should you look for when hiring a business valuation expert?
- Are they a certified appraiser? Many appraisers go through the certification process to help highlight their experience and education. The process of becoming certified can take several months of classes, documentation and similar preparation work. This means that they're dedicated to the industry and are planning on sticking around. The certification process also teaches the appraiser which calculations should be used in which circumstances, with methodologies that have stood up to solid scrutiny in legal, financial, insurance and tax circles.
- Do they have experience in your industry? Industry experience allows a seasoned appraiser to determine whether the current market situation is a brief hiccup or part of a larger downward trend. It also provides an appraiser with an idea of what a business in your industry should look like, giving them a solid basis upon which to compare your business.
- What is their past experience? If the appraiser you hire doesn't have a lot of experience valuing businesses in your industry, you may get less accurate information from the appraisal report. Have they come out of a sales position or real estate background, or an accounting background? This may somewhat impact their approach to how your business is valued, but either should be able to provide you with a sound appraisal.
- Can they provide you with references? Any experienced certified appraiser should be able to provide you with references as to the quality of their work. Don't settle for simple client testimonials, which may be falsified or from a few choice clients who were particularly pleased with the appraisal work that was provided. Take the time to follow up with at least one or two of the provided references to ensure the appraiser has a solid record of good work behind them.
- Are there any complaints with commerce organizations or review sites? Whether it's the Better Business Bureau, Google, Facebook or any number of other services where reviews can be left, take a look at whether the appraiser has left any bad experiences behind. If the complaint deals with issues that are not related to the appraisal process, such as odd business hours or a difficult to find office location, you may want to ignore it, but if they deal with serious concerns in appraisal practice, you may want to go elsewhere for your business appraisal.
By knowing what to look for in a business valuation expert, you're able to make a more educated selection when faced with several possibilities. This helps ensure that you're making a solid choice that will benefit your company not just now, but also in the future, based on how you choose to act on the information the appraiser provides. Instead of having to guess which business appraiser will be the best fit for your company, you'll now have a better idea of what an experienced, qualified business appraiser looks like.