How much does a professional business valuation typically cost?

Costs vary considerably depending on the complexity of the business, the specific purpose of the valuation, and the credentials of the professional performing it, ranging from a relatively modest fee for a straightforward small business to a substantial cost for a complex, multi-entity valuation requiring extensive analysis.

Can I estimate my own business’s valuation without a professional?

A rough estimate is possible using publicly available information about comparable businesses or straightforward financial ratios, but for any decision with significant financial or legal consequences, such as a sale, a loan application, or a tax matter, a professional valuation generally provides a more defensible, credible figure that a bank, buyer, or tax authority is more likely to accept.

Does valuation apply only to businesses, or can other assets be valued too?

Valuation applies broadly to virtually any asset without a continuously quoted public price, including real estate, intellectual property, and certain types of investments, using similar underlying principles adapted to the specific characteristics of that asset type.

Back to Glossary

Valuation: putting a number on what a business is actually worth

Key takeaways
- Valuation estimates the worth of a business, asset, or investment, typically to support a specific decision like a sale, an investment, a loan, or a tax filing.
- The three core approaches are the market approach (compared to similar sales), the income approach (discounting expected future cash flow), and the asset-based approach (assets minus liabilities).
- Professional valuations often blend more than one method, since each can produce a somewhat different figure depending on the business and available data.
- For a business with assets or operations in more than one country, valuation needs to account for local market conditions before any currency conversion.
- Being explicit about which exchange rate and date were used protects against a misleading conclusion drawn from currency movement rather than genuine business performance.

Valuation is the process of estimating the worth of a business, asset, or investment. Here are the main methods used, and what to know for a cross-border asset.

What is valuation?

Valuation is the process of estimating the worth of a business, asset, or investment, typically to support a specific decision such as a sale, an investment, a loan application, or a tax filing. Unlike a stock’s market price, which is set continuously through public trading, valuing a private business or a unique asset requires a deliberate analytical process, since no continuously updated public price exists for reference.

The main methods used to estimate valuation

Professionals typically rely on one of a few core approaches, and understanding these helps in making sense of how a specific valuation figure was reached. The market approach compares the business or asset to similar ones that have recently sold, adjusting for relevant differences, similar in spirit to how a home’s value might be estimated by comparing it to nearby recent sales. The income approach estimates value based on the future income or cash flow the business or asset is expected to generate, discounted back to a present value. The asset-based approach adds up the value of a business’s individual assets minus its liabilities, which tends to work best for a business with significant tangible assets and less established ongoing earnings.

No single method is universally correct, and professional valuations often use more than one approach, then reconcile the results into a final estimate, since each method can produce a somewhat different figure depending on the specific business and available data.

Why valuation matters for a small business

For a small business owner, valuation isn’t just an academic exercise; it has real practical consequences. A valuation supports decisions like bringing in a business partner, applying for a loan using the business as collateral, planning an eventual sale, or handling an estate or succession matter. For SBA-guaranteed loans specifically, an independent valuation from a qualified source is generally required once the financed amount exceeds a set dollar threshold, or when the buyer and seller have a close relationship, such as family members or existing business partners, so confirming these requirements with a lender early avoids delays later in the process. Reviewing federal and state programs available to immigrant business owners⁠(opens in new window) is a useful related resource, since several of these programs, including certain loan and grant opportunities, may specifically require a documented business valuation as part of the application process.

Valuation across borders

For an immigrant entrepreneur with business interests or assets in more than one country, valuation becomes more complex, since a business’s worth needs to be assessed according to the specific market conditions, accounting standards, and economic environment of the country where it operates, then potentially converted for comparison or reporting purposes in another currency. A valuation performed by a professional unfamiliar with a specific country’s local market conditions can produce a considerably less reliable estimate than one performed by someone with genuine local expertise, worth prioritizing over convenience when a valuation genuinely matters for a significant decision.

Currency risk note

Converting a valuation figure from one currency to another introduces an additional variable beyond the underlying valuation methodology itself, since the specific exchange rate used, and when it’s applied, can meaningfully shift the converted figure even if the business’s local-currency valuation hasn’t changed at all. A business valued consistently in its own local currency over several years can appear to gain or lose value in a foreign currency’s terms purely due to exchange rate movement, separate from anything happening within the business itself. Being explicit about which exchange rate and date were used for any cross-border valuation comparison protects against a misleading conclusion drawn from currency movement rather than genuine business performance.

What to expect from a professional valuation

Expect to provide detailed financial records. A thorough valuation typically requires several years of financial statements, tax returns, and other documentation to support an accurate estimate.
Ask which specific method or methods will be used. Understanding the approach helps in interpreting the resulting figure and its limitations appropriately.
Clarify the specific purpose of the valuation upfront. A valuation prepared for a tax filing may differ somewhat from one prepared for a sale negotiation, since the appropriate standard and assumptions can vary by purpose.
For a cross-border business or asset, seek someone with genuine local market expertise. A valuation professional unfamiliar with a specific country’s market conditions may produce a less reliable estimate than one with direct local experience.

Common mistakes that undermine a valuation’s credibility

A few recurring mistakes can meaningfully weaken a valuation’s usefulness or credibility, and being aware of them helps in avoiding repeating them. Relying on outdated financial information, rather than the most current available records, can produce an estimate that no longer reflects the business’s actual current condition. Failing to adjust for one-time or unusual events, such as an unusually large one-off expense or a temporary surge in revenue, can distort a valuation that doesn’t account for these anomalies appropriately. Using a valuation method poorly suited to the specific type of business, such as applying an asset-heavy approach to a business whose real value lies primarily in its brand or customer relationships rather than physical assets, can also produce a misleading result. Working with a professional who takes the time to understand these specific nuances of the particular business, rather than applying a generic template mechanically, generally produces a more credible and useful valuation.

Common questions about valuation

How much does a professional business valuation typically cost?

Costs vary considerably depending on the complexity of the business, the specific purpose of the valuation, and the credentials of the professional performing it, ranging from a relatively modest fee for a straightforward small business to a substantial cost for a complex, multi-entity valuation requiring extensive analysis.
Can I estimate my own business’s valuation without a professional?

A rough estimate is possible using publicly available information about comparable businesses or straightforward financial ratios, but for any decision with significant financial or legal consequences, such as a sale, a loan application, or a tax matter, a professional valuation generally provides a more defensible, credible figure that a bank, buyer, or tax authority is more likely to accept.
Does valuation apply only to businesses, or can other assets be valued too?

Valuation applies broadly to virtually any asset without a continuously quoted public price, including real estate, intellectual property, and certain types of investments, using similar underlying principles adapted to the specific characteristics of that asset type.

In Summary

Valuation is the structured process of estimating what a business or asset is genuinely worth, using one or more established methods depending on the specific situation and purpose. For anyone with business interests or assets spanning more than one country, seeking a professional with genuine local expertise, and being explicit about currency conversion assumptions, protects the accuracy and credibility of the resulting figure.

This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant, or otherwise guarantee that the content is accurate, complete, or up to date.