What Makes a Good Business Valuation Expert
For boards, legal counsel & investors
Business valuations can shape decisions with serious consequences — what a company sells for, what a court awards, what an estate owes. The number itself is only as reliable as the person who produced it and the reputation of that person’s firm. Five factors distinguish a valuation that will hold up from one that will not.
1. Training and Credentials
A college degree in economics, statistics and finance sets the stage, giving an expert the analytical grounding on which solid valuation skills are built. Obtaining the right credential provides the specific training that forms the foundation of a good valuation expert. The Accredited Senior Appraiser – Business Valuation (ASA) designation from the American Society of Appraisers is the gold standard, with demanding four level training courses and a minimum five-year full-time business valuation experience requirement. The ASA is awarded only after a peer body has reviewed the expert's work and found it sound and maintained through a code of ethics and ongoing continuing education.
2. The Devil is in the Details
A defensible valuation is built line by line: one-time charges adjusted out, related-party transactions caught, every figure traceable back to the underlying financials, and complex multi-spreadsheet models QC’d for 100% mathematical accuracy and cross referencing . This crucial attention is what separates a valuation that survives review and prevails from one that collapses the first time someone checks the details.
3. Seasoned Judgement Backed with Solid Due Diligence
Method and credentials establish that an expert knows how a valuation should be conducted. Judgement is what tells good experts when a standard assumption does not fit the facts in front of them. An expert with decades of experience has already encountered the industries, transaction types, and disputes that make a given engagement difficult, and knows where the analysis needs closer scrutiny. That same assurance extends to the firm behind the expert. A valuation firm that has operated for decades has refined its due diligence process across a wide range of engagements, so that judgement and rigorous analysis are applied hand in hand on every case, not left to the instincts of any one person.
4. Adapting to Change
Markets do not hold still, and the same goes for valuation due diligence and methodologies. New technology, shifting supply chains, and disruptive industries change both what a company is worth and how that worth is proven. A data-heavy or AI-driven business, for instance, often cannot be valued using comparable business sales transaction that would have been used three years ago. Experts who update their models as the ground shifts are doing their job; those who force every business into the same template are not.
5. Expert Witness Experience
A valuation that only works on paper is not enough in a dispute. Courtroom experience means the expert can explain a complex model in plain terms, hold up under cross-examination, and meet the evidentiary bar a judge or arbitrator applies — without the opinion breaking down under pressure.
Five factors. One question worth asking before you rely on the number: who and what firm is behind it? Who will testify in deposition and trial? Who will present it to the board of directors and shareholders?
Nevin Sanli has been a financial consultant for over 40 years, specializing in forensic accounting, business, brand & IP valuations, fairness & solvency opinions and transaction advisory services.
For further information and advice, contact Nevin at:
(310) 571-3400
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