A business valuator is an accounting specialist who focuses on determining the value of businesses. Business valuators are usually certified public accountants, and they may also hold masters degrees in business administration. These professionals may be called in for a wide variety of situations, ranging from the valuation of a business for sale to ensure that a reasonable price is asked to the determination of someone's share of the assets in a business which is being split.
Becoming a business valuator takes work. Simply training as a CPA is usually not enough; it is also necessary to get experience in the industry. Business valuators may train with other people who work in this field, and often have experience in an area of business which they can apply as a valuator. For example, someone could specialize in valuing tech companies or hedge funds, using experience for working in and with such companies. The more experience a valuator has, the more accurate his or her work will be.
A classic reason to request a valuation of a business is to prepare a business for sale. The business valuator determines a fair asking price, and may provide advice about raising the value of business to prepare it for sale. Tax agencies may also utilize a business valuator if they are conducting an audit and want to confirm the value of a business. Likewise, valuators are used when businesses are being split because partnerships are dissolving or as a result of divorce proceedings.
There are several models which can be used when assessing the value of a business. One is to simply look at the assets held by the business. This model can be fast when it comes to making a valuation, but not always accurate. Another option is to examine projected income, which can provide a better picture of long-term value. Finally, a business evaluator can also look at the worth of a business relative to the market, both for businesses of that type, and in general.
Pay for a business valuator can vary. People who work in private practice tend to command higher fees for their services, often because they have years of experience to rely upon, sometimes paired with industry-specific specialization. People who work for the government may collect less money, but they get diverse experience which can be put to good use in private practice later, should they choose to enter the civilian workforce.