The Importance of Working with an Experienced Business Valuator

Citrin Cooperman’s Valuation Advisory Services Practice is highly skilled at valuing closely held businesses (CHB). A CHB is a private business where the ownership units of the company are not actively traded on the public market. As such, the value of a CHB is generally unknown and must be determined through a formal process called a business valuation. CHBs tend to be smaller companies, often family-owned and operated or owned by a handful of individuals who control the day-to-day functions of the business.

Business valuations are an integrated set of processes and procedures used to determine the value of a CHB. Business valuations require a complex set of knowledge that incorporates aspects of accounting, finance, taxation, economics, data analysis and depending on the type of engagement, the ability to work with counsel and provide litigation support services.

Although the business valuation process has its complexities, experienced business valuators can seamlessly assist with all aspects of the process. These professionals work with a client and the client’s advisors to help determine the specific need for the valuation, the subject interest to be valued, the standard of value to be utilized, the necessary information required to complete the valuation, relevant empirical databases to consider, and the type of deliverable required to satisfy the end user of the valuation (i.e., Internal Revenue Service, a court, etc.). The challenging decision for the client is often choosing an experienced business valuator best suited for their needs.

Beware of the “Jack of all Trades” Consultant

In today’s digital age, business owners are short on time and more inundated than ever before with information. From traditional media to social media to emails to mass-texting, self-promotion and branding have reached new heights. Consultants and professionals often position themselves as specialists on such broad-ranging subject matters that it becomes difficult to gauge whether the professional is truly specialized in a particular subject matter.

This places the business owner, who is typically the person who requires the valuation of their CHB, in the precarious position of choosing their valuators wisely. After all, CHBs are often the lifeblood for their owners, serving as their largest or most important asset in their personal investment portfolios. An improper business valuation can produce misleading results or results that do not uphold the valuation standards, which can have further ramifications depending on the end use of the valuation.

It is imperative to hire a highly specialized professional experienced in working with CHBs to avoid future complications. To effectively address the business’ and owners’ financial needs, the valuation of the CHB should be completed by a specialized business valuator who has sound experience and deep knowledge in the subject area.

How Citrin Cooperman Can Help

Citrin Cooperman’s Valuation Advisory Services Practice is comprised of experienced and highly skilled financial analysts who can assist with accurate, reliable, and credible valuations of CHBs. With specializations in business valuation, forensic accounting, and litigation support services, our team is equipped to value CHBs in diverse industries for various purposes.

To learn more, please contact Nick Backmann or your Citrin Cooperman advisor.