The business appraisal profession is a challenging and awarding profession requiring substantial training, experience and dedication to excellence. The appraisal profession in general is a fragmented industry made up mostly of small appraisal firms specializing within one or more appraisal disciplines. There are a few large national firms that conduct business appraisals throughout the U.S. and other countries. Most, however, are small local or regional firms who often specialize in specific size or types of businesses. A large portion of the appraisal business is for litigation and/or taxation issues which are often challenged in court. Therefore experience, education and professional designations set apart those who have the necessary education, experience and credentials to properly conduct business appraisers from those who conduct business appraisals as a sideline to other business lines they conduct.
Business appraisers come from many walks of life with no one specific background being required. Today, many people in the profession have come out of college with advanced degrees in accounting or finance and joined established appraisal firms for training in business valuation. Others have gotten into conducting business appraisals through experience in related fields such as business brokerage, accounting, and other appraisal disciplines.
While there are a few appraisal firms that specialize in appraising specific type businesses, such as medical practices, utility companies, and mineral related companies, most business appraisers handle a vast variety of business types ranging from small to publicly held companies. The education and experience of the appraiser often dictates the types and size of businesses handled.
For someone recently graduating from college with a business degree or persons with a strong financial background, the quickest way to get into the profession and earn a living is to join an existing business appraisal firm who can provide the necessary training and support to ensure that you gain valuable education and experience needed to conduct business appraisals that will meet the requirements of the clients, governmental agencies, courts of law, the Appraisal Foundation and the professional appraisal societies.
Due to the necessary experience and educational requirements necessary to conduct Business appraisals, Business Appraisers are among the highest paid with the appraisal profession. A typical appraisal company will employ clerical support staff, financial analysts, and professionals appraisers. Appraisers usually quote their fees either as an hourly rate, which can vary depending upon the level of expertise of those working on the assignment, or as a flat fee assignment. Most all appraisers quote their fees for litigation support, such as testifying as an expert witness, on an hourly basis.
In general, business appraisal fees are similar to other professionals in the legal and accounting fields. Appraisers who work for an appraisal firm often do so either on a salary basis or a sharing arrangement based upon the total fee for the assignment and contribution of the appraiser to the assignment.
As in most any profession, education and experience are the core factors that set business appraisers apart. No governmental agency requires that business appraisers be licensed; however, most business appraisers belong to one or more professional appraisal organizations that award professional designations based on educational, experience, and peer review. The following is a brief review of the professional designations awarded by the most recognized appraisal societies:
APPRAISAL ORGANIZATION
PROFESSIONAL DESIGNATIONS
BRIEF DESCRIPTION OF REQUIREMENTS
American Society of Appraisers
AM - Accredited Member
College degree, 2 years appraisal experience, Complete 4 courses & exam, & Peer Review of Appraisal Reports
Completion of all the above, plus Member an additional 3 years of appraisal experience.
Has met all the above qualifications, Plus has been voted into the College of Fellows based on leadership & professional contributions.
Institute of Business Appraisers
Has met all the above Appraiser requirements, plus 10 Business years of practice experience, credit for published writing or lecturing and references from 4 other CBAs.
Has met all the above requirements, plus voted into the College of Fellows on the basis of leadership and contributions to the appraisal profession.
National Association of Certified Valuation Analysts
Business degree, Completion of Analysts exams, and 2 years experience or have performed 10 or more business valuations.
College degree, Completion of Analysts one course & exam and must be a CPA.
American Institute of Certified Public Accountants
AICPA member with CPA Business Valuation license, One day exam, involvement in 10 business valuation engagements.
Business College degree, Completion of 6 Valuator courses & exams, and 2 years of full time experience
Met all the above, plus elected my members.
The type of firms conducting business appraisals is less important than the credentials of those persons who will be conducting the appraisal. Firms that often conduct business appraisals and provide litigation support either as a full time endeavor or on a part-time basis include:
Full time appraisal firms
They typically handle a large variety of appraisal assignments involving litigation and taxation issues.
Business brokerage firms
Economic Consulting Firms