How Much Does a Business Valuation Cost in 2024?

How Much Does a Business Valuation Cost?

A standard business valuation, especially those for small businesses with limited complexity, will cost between $2000 and $10,000

But in some complex cases, they can cost up to $100,000. 

The exact price depends on what valuation method is required, the complexity and size of your business, and the purpose behind the valuation. 

No matter your size, there are some instances where your business valuation is more likely to exceed $10,000:

  • Mergers and Acquisitions (M&As)
  • Partner buy-ins
  • Litigation
  • Gift tax valuation of business interests
  • Gross aggregate asset valuations for IRC 1202 (qualified small business stock)
  • Bankruptcy / restructuring

5 Key Factors That Influence Business Valuation Costs

Because every business is unique and the circumstances driving the need for a valuation are different, we always provide custom quotes to clients based on a few defining factors.

They are:

  • Business complexity & size
  • Purpose of valuation
  • Methodology applied
  • Experience of valuer
  • Turnaround time

These considerations are standard for any firm offering business valuation services. Let’s look at each in detail.

Factor 1: Business Complexity & Size

The larger and more complex your business the more time and resources needed to accurately value it. As time and resources go up, so does the cost.

For a standard valuation, large corporations can expect to pay between $50,000-$100,000 or more. 

Mid-sized companies may pay $10,000-$50,000. 

For example a company that earns $10M+ in revenue will fall somewhere between $15,000 and $30,000.

And smaller businesses, fall somewhere between $2,000-$10,000.

But why do larger, complex businesses require more resources?

Because they come with:

  • Complex Financial Structures: Larger companies frequently have more detailed, and sometimes nuanced, financial records, with diverse revenue streams, complex assets, and various investments. Navigating through these complex financial structures requires more time and specialized expertise.
  • Operational Complexity: Larger companies often have multiple departments and different P&Ls, international operations, and a range of products or services. Understanding and evaluating each segment’s contribution to the company’s value adds layers of complexity to the valuation process.
  • Regulatory and Compliance Considerations: Larger companies are typically subject to more stringent regulatory and compliance requirements, which can impact their valuation. Assessing these aspects accurately demands a deeper understanding of legal and regulatory frameworks, adding to the valuation cost.
  • Complex Capital Structure and Diverse Stakeholder Interests: Valuations for larger companies often need to consider complicated waterfalls, satisfy a variety of stakeholders, shareholders, regulatory bodies, and potential buyers. Catering to these diverse interests requires a more comprehensive and detailed approach.
  • Market and Industry Analysis: Evaluating a larger company’s position in the market and its industry typically involves extensive research. Analysts must consider global market trends, industry dynamics, and competitive landscapes, which requires additional resources and time.
  • Risk Assessment: The complexity of risk assessment increases with the size of the company. Larger firms might be exposed to a wider range of risks, including market volatility, geopolitical factors, and technological disruptions. Assessing these risks accurately is critical and demands a sophisticated approach.

A major influence over the cost of your business valuation is the why behind it.

Is it for a merger? A sale? A court case? Something else entirely?

Each purpose brings unique considerations and risks that drive up or down the price.

For example, business valuation for the purpose of:

  • Tax Planning and Compliance: In this situation, accuracy and fullness of disclosure is important, requiring a thorough quality control and compliance review to make sure the requirements imposed by the Internal Revenue Code are met. This can push the valuation costs up.
  • Litigation Support: Here, the stakes and costs are significantly higher. Valuations must be thoroughly detailed and defensible in court, often requiring the valuator to act as an expert witness. This attention to detail and potential court involvement makes these valuations the most expensive.
  • Strategic Planning: In this case, the valuation serves an internal purpose, guiding business owners in understanding their company’s current standing and potential strategic moves. These valuations, while comprehensive, usually don’t bear the high costs associated with tax compliance, transactional, or litigation-related valuations.
  • Financing and Fundraising: Valuations for this purpose are designed to appeal to investors or lenders, highlighting the business’s growth potential and market position. These valuations strike a balance between being detailed enough to be persuasive and cost-effective enough to ensure the financial viability of the fundraising or financing efforts.

The methodology needed to complete the valuation will influence the final cost. This is because some are more rigorous and resource intensive than others. 

An asset-based approach typically starts around $5,000 while an income approach begins around $10,000. Of course, there are instances where more than one approach is required. 

These usually begin at $10,000. 

Typically, the more experience a valuer has, the more expensive their business valuation services will be. 

For example, if a valuer has years of experience completing business valuations for mergers & acquisitions they will charge more than someone who is just starting out. 

You’re essentially paying for their ability to handle complex valuations and ensuring its accuracy. 

These experienced valuers often have advanced credentials, such as:

  • Chartered Business Valuators (CBV)
  • Chartered Financial Analyst (CFA)
  • Certified Public Accountant (CPA)

The final, and likely most influential factor driving cost up is how quickly you need the business valuation completed.

The faster the turnaround, the more you’ll pay. This is because the valuator will need to rearrange their workload to accommodate your urgency.

A standard business valuation from Eton will take ____ days but if needed, can be done in as little as one.

What’s included in our business valuation costs?

We’re a boutique valuation specialist, so we offer careful customer service and top tier valuation expertise with affordable prices.

For most business valuations, we offer flat rate fee structures. 

These include:

  • an expert valuation on par with “big 4” accounting firms
  • up to two hours of post-valuation discussion with management, your board, the legal team, auditors, or whoever else you’d like us to speak with

As part of your business valuation, we follow this 5-step process:

  1. Financial review: We review 3-5 years of historical financial statements to analyze trends in revenue, profits, cash flow, and key ratios. This helps us understand the company’s financial health and earnings potential.
  2. Operation review: We evaluate your business’s operations, growth opportunities, competitive position, and risks. This includes interviewing management, touring facilities, and reviewing strategic plans.
  3. Market & industry research: We research industry trends, economic indicators, and comparable company valuations. This external analysis provides context for evaluating your business’s performance and potential.
  4. Valuation methods applied: We apply valuation methods like the income, market, and asset approaches to estimate the business’s fair market value. We determine the strengths and weighting of each method based on your business’s attributes.
  5. Final report delivered: We prepare a detailed valuation report summarizing our findings, value conclusions, and recommendations. The report provides an objective basis for business planning, financing, ownership changes, litigation, or other purposes.

Keeping Business Valuation Costs Low: How to Choose the Right Provider

When choosing your business valuation provider, you want to strike a balance between affordability and quality. One shouldn’t eclipse the other. 

To strike that balance, I recommend looking for a provider who:

  • Has relevant experience. If you need a business valuation for a merger, don’t hire a firm that specializes in business valuations for divorce appraisals. You’ll want someone familiar with the complexity and nuances of your exact situation.
  • Comes recommended by your lawyer. Any recommendation your lawyers make will be done in your best interest. They’ll have worked with valuators in the past and know who they do and don’t trust.
  • Is big 4 trained, but doesn’t charge big 4 prices. To get quality without paying extortionate prices, you should look for valuators who have worked in big 4 firms in the past but now operate in a smaller firm. 
  • Prioritizes your experience. You want a valuator who takes the time to make sure you understand the valuation process and results, especially given the investment you’re making and the potential impact a valuation can have.
  • Has a proven track record. Nothing speaks as loudly as social proof. Consider valuators who have rave reviews from past clients and are trusted in your industry.

Why Choose Us For Business Valuations

At Eton, we have a dedicated team of legal and finance experts who are Big 4 trained and understand the nuances and complexities of all business valuation types. 

Every report we produce is accurate and easy to understand, giving you and anyone else who needs it, a thorough understanding of your business and invaluable insights that can drive future success and better decision making. 

We pride ourselves in our attention to detail and client relations. We spend time getting to know you and your business while being on hand to answer questions and provide peace of mind wherever we can. Our clients return time and time again for their valuation needs. 

A screenshot of review from Eton customer

Our entire focus is on delivering audit-defensible, rigorous, and timely valuations without the inefficient back-and-forth of other firms.

For a cost-effective, quality business valuation service get in touch with us here. 

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Schedule a free consultation meeting to discuss your valuation needs. 

President & CEO

Chris co-founded Eton Venture Services in 2010 to provide mission-critical valuations to venture-based companies. He works closely with each client’s leadership team, board of directors, internal / external counsel, and independent auditor to develop detailed financial models and create accurate, audit-proof valuations.

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