Business Valuation Service Cost

August 13, 2021

by a searcher in San Diego, CA, USA

Hi all,

I'm in the process of purchasing a minority share in an established automotive repair facility in Southern California with approximately $2 million in annual revenue. We're at the point of having a valuation done on the business to establish the cost of equity, and the accountant came back with a business broker contact who has offered to perform the valuation for $1850. This is my first deal, and I really don't have a good concept of how much this service should cost...can anyone chime in and let me know if this is how much I should expect to pay? Thanks for your help and feedback!

Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA

Valuations are one of those things that you get what you pay for, and as such we offer a continuum along the line of 4 different levels. It also depends on your purpose (just for your own edification or to use with IRS or partners/estates later, etc.) and can be conducted by accredited appraisers or not. Minority interest also adds layer. I'll second ^redacted‌ and recommend fellow Murphy Broker (and certified appraiser) ^redacted‌.

Reply by a professional
from New York University in New York, NY, USA

I agree with ^redacted‌ that you definitely get what you pay for. I've found that when business brokers do a valuation that it's more of the "back of the envelope" type than a full valuation. If you're looking for something firm, then I'd look for someone with experience, or if you're into credentials look for someone with an ABV.

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