Valuation of Privately-Held Businesses

Abstract

Business valuation, also referred as business appraisal, is a profession still in its infancy. It is, however, a profession that is growing rapidly as a greater number of people develop the need to accurately value businesses. This increased demand for valuation services arises out of the need to price a firm when ownership changes or to determine a value in property settlement disputes, estate valuations, partnership dissolutions, and other legal proceedings. Most of the time, however, the need exists to accurately value a firm for buy and sell transactions. In the United States alone, virtually thousands of businesses change ownership every year. Given this need for valuation services, it is surprising that only recently has business valuation begun to emerge as a unified discipline in the United States.