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What does a Business Appraiser do?

By Daphne Mallory
Updated: May 17, 2024
Views: 2,069
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A business appraiser is responsible for determining the fair market value of a business based on accounting and business valuation principles. Appraisers use data such as recent sales for comparable businesses and related transactions to determine the value of a business. The appraiser visits the business, conducts interviews, and prepares a report about the business he is evaluating. Some business appraisers are legal expert witnesses in civil litigation and often appear in court to provide testimony or work with attorneys to provide the expertise they need to prepare a case. A business appraiser can become a certified business appraiser, whose responsibilities can include testing, additional training, and peer review.

Individuals hire business appraisers for a number of reasons, including estate planning, divorce settlements, and business acquisitions. Buyers hire business appraisers to know how much the business they are considering for purchase is worth, which will affect their offer for a purchase price. Business owners hire business appraisers to know the value of the business, which helps them to determine a selling price to list. The business appraiser’s job is to use her business valuation training and expertise to provide clients with information, research, and an amount for what the business is worth. A business appraiser often delivers the results in a written and well-documented report, much like a business consultant.

The daily duties and responsibilities of a business appraiser involve evaluating the activities of buyers and sellers of businesses, compiling and analyzing data, and issuing opinions about the estimated fair market value of the business. The appraiser often has to rely on business valuation techniques and methodologies to make sense of the data that he has collected. Common techniques include interviewing the business owners and others who are decision makers in the company, as well as other industry experts. This is one of the reasons why individuals who want a business appraiser career need good communication skills, such as good writing and speaking skills. Appraisers often meet with company management and must be able to solicit and communicate information effectively in order to do their job.

Analyzing data is a key function of a business appraiser. These appraisers understand how to value the real property as well as tangible and intangible assets that belong to the business that they are hired to appraise. An example of a tangible asset includes inventory, and an intangible asset includes the intellectual property that the company owns as well as brand equity.

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