When private business owners should commission a valuation

Private business owners typically come to a valuation engagement at one of a handful of inflection points. Recognizing the inflection point — and engaging early — usually matters more than the precision of any single number on the page.

Common triggers

A valuation is most often commissioned ahead of one of the following:

• A planned sale, merger, or recapitalization
• A shareholders' agreement event (buy-sell triggered by departure, retirement, or estate)
• A management buy-out or succession transaction
• Estate freeze planning, gifting, or other tax-driven restructuring
• Financial reporting (purchase-price allocation, goodwill impairment testing)
• Litigation or dispute support — including expert reports filed with a court
• A financing round or new investor admission

Each of these contexts carries different scope and standards. A formal report supporting a corporate-tax filing is not the same engagement as a calculation report for a partner buy-out, and neither is the same as an expert report filed in litigation.

Why timing matters

Owners often delay the engagement until a transaction is imminent. By that point the most useful applications of a valuation — informing negotiation strategy, identifying value drivers worth strengthening, surfacing tax structures that take twelve to eighteen months to implement — are no longer available.

Engaging earlier doesn't mean producing a final report earlier. It means having a documented baseline view of value before the questions become urgent. The baseline can be updated as facts change.

What to expect

A typical engagement will involve:

1. Scoping — defining the valuation date, standard of value (fair market value, fair value, intrinsic value), and report format suited to the use case.
2. Information request — historical financial statements, tax returns, customer concentration data, contracts of significance, and any prior valuation work.
3. Analysis — applying one or more accepted valuation approaches (income, market, asset) and reconciling the indications.
4. Independent review — internal partner-level review before any draft leaves the firm.
5. Reporting — a written report appropriate to the standard required (calculation, estimate, or comprehensive report under CBV Practice Standards).

Owners considering a valuation in the next twelve to twenty-four months are well served by an introductory conversation now. The conversation is confidential and rarely takes more than thirty minutes.

This article is for general information only and is not a substitute for professional advice. Specific situations require engagement with a Chartered Business Valuator and, where applicable, tax counsel and legal counsel.