Business Valuation Services
CPA-prepared business valuation services for sales, mergers, buy-sell agreements, succession, lending, gift and estate tax, divorce, litigation, and 409A. We explain the number, the method behind it, and what moves it.
Request a Valuation QuoteWhen You Need a Business Valuation
A business valuation is a written estimate of what a company, or an ownership interest in it, is worth on a given date. The purpose drives everything else. It sets the standard of value, the level of detail, and the type of report you need.
Owners usually come to us at a turning point. A buyer has called, a partner wants out, a lender needs support for a loan, or an estate plan calls for gifting shares. Some clients just want to know where they stand before they plan an exit. Our guide to calculating company worth covers the basics if you want to run rough numbers first.
Valuation also fits into the wider finance picture. We often pair it with our accounting and financial services, because clean books produce a more defensible value.
Common Reasons for a Valuation:
- Selling the company or buying another one
- Setting or funding a buy-sell agreement
- Succession to family, partners, or key employees
- SBA or bank financing for an acquisition
- Gift and estate tax filings
- Divorce, partner disputes, and litigation
- Setting stock option prices under Section 409A
Wondering what your business is worth?
Start with a short scoping call. We will confirm the purpose, the standard of value, and the report you need.
Valuation Methods (DCF, Market, Asset)
Discounted Cash Flow
An income approach method. We project future cash flows, then discount them to today at a rate that reflects risk. DCF works best when a company has a credible forecast or expects growth to change.
Capitalization of Earnings
Also an income approach method. We take one normalized level of earnings or cash flow and divide it by a capitalization rate. It suits stable companies with steady, predictable results.
Guideline Public Company
A market approach method. We compare your company to similar public companies and apply adjusted pricing multiples. Size and risk differences usually call for careful adjustments.
Transaction Multiples
Another market approach method. We look at sale prices of comparable private companies, expressed as multiples of revenue, earnings, or cash flow, and apply a supported range to your results.
SDE vs EBITDA
Small, owner-run companies usually trade on seller's discretionary earnings (SDE), which adds back one owner's pay and perks. Larger companies with management teams trade on EBITDA. Using the wrong measure distorts the result.
Asset Approach
We restate assets and liabilities at current value. This approach suits holding companies, asset-heavy businesses, and companies that earn too little to support a higher income-based value.
409A Valuations
Section 409A of the Internal Revenue Code governs deferred compensation. An option priced below fair market value on the grant date can fall under 409A. A failure can mean immediate income, a 20% additional tax, and interest for the employee. Private companies therefore need a supportable common stock value before they grant options.
Treasury Regulation 1.409A-1(b)(5)(iv)(B) lists methods the IRS presumes reasonable. The most common is an independent appraisal performed within 12 months before the grant. Two other safe harbor methods cover formula prices used in nonlapse restrictions and certain illiquid start-up stock. When a safe harbor applies, the IRS can rebut the value only by showing the method or its application was grossly unreasonable.
A new appraisal is wise sooner than 12 months if something material changes, such as a new funding round, a large contract, or a pending sale.
What a 409A Valuation Reviews
- Tangible and intangible assets
- Expected future cash flows
- Values of comparable companies
- Recent arm's length stock sales
- Control and marketability discounts
- Rights of each share class in a cap table
Standards of Value and IRS Factors
Every valuation answers a specific question: worth what, to whom? The standard of value defines that question, and the IRS has long set out the factors a tax valuation should weigh.
Treasury regulations define it as the price at which property would change hands between a willing buyer and a willing seller, neither under any compulsion to buy or sell, and both with reasonable knowledge of the facts. Tax valuations use this standard.
This IRS ruling sets out factors for valuing closely held stock. They include the nature and history of the business, the economic and industry outlook, book value and financial condition, earning capacity, and dividend-paying capacity.
The ruling also looks at goodwill and other intangibles, prior sales of the stock, and the size of the block being valued. It adds market prices of similar public companies. The IRS still uses these factors in its own valuation guidance.
State law and court decisions define fair value for shareholder disputes and dissenters' rights cases. It may treat discounts differently than fair market value, so the jurisdiction matters.
This is the value to one specific buyer, including that buyer's synergies. It explains why a strategic buyer may pay more than a financial buyer for the same company.
A minority interest without control, or shares that are hard to sell, are often worth less per share than the whole company. We support any discount with data, not rules of thumb.
Valuation for M&A
In a sale or acquisition, the valuation sets a realistic price range before talks begin. For sellers, it shows which earnings adjustments a buyer will accept and which ones a buyer will challenge. For buyers, it tests the asking price against the cash flow.
Deal structure changes what the owner actually keeps. Earnouts, seller notes, working capital targets, and asset versus stock sales all affect after-tax proceeds. Our article on valuation multiples, deal structure, and proceeds walks through these trade-offs using CPA firm sales as the example.
Buyers that finance with an SBA or bank loan should expect the lender to set its own valuation and reporting rules. We confirm those rules up front so the report fits the lender's file.
What We Prepare for a Deal
- Normalized earnings with documented add-backs
- SDE or EBITDA, matched to company size
- A supported value range, not a single guess
- Working capital and debt adjustments
- Notes on tax effects of deal structure
Valuation for Succession and Exit
A succession plan needs a price that both sides can live with. That might mean a sale to family, a buyout by partners, or a transfer to key employees. Buy-sell agreements should name the valuation method and how often to update it, so a death, disability, or departure does not start a dispute. Our succession planning work builds the valuation into the timeline.
Gifts of company shares need a defensible value too. When a gift tax return includes a qualified appraisal, it can meet the IRS adequate disclosure rules, which start the statute of limitations on that gift. Our tax planning team coordinates the return and the valuation.
Valuation for Divorce or Litigation
Divorce, partner disputes, and damages claims need a value that stands up to cross-examination. State law decides the standard of value and the valuation date, and courts differ on how they treat personal goodwill and discounts. We document each assumption and source, and we keep the analysis consistent from report to deposition.
Cannabis Businesses Need a Different Lens
- Section 280E still blocks most federal deductions for adult-use sales, which remain Schedule I
- State-licensed medical marijuana moved to Schedule III effective April 28, 2026
- After-tax cash flow, not EBITDA, drives value under 280E
- Standard industry multiples often overstate value
- Read why standard multiples fail for cannabis
Planning a sale or buyout in the next few years?
A valuation now shows which numbers to improve before buyers start asking questions.
Cost and Timeline
Fees depend on scope, the standard of value, and the report type. A calculation for internal planning takes less work than a full valuation. A detailed report for a court or the IRS takes the most. Complexity matters too: multiple entities, several share classes, messy books, or a minority interest all add time. We give you a fixed quote after a short scoping call.
Timing follows the same drivers. A simple company with clean financials and quick answers moves in a few weeks. Litigation work, multi-entity groups, and engagements that wait on missing records take longer. The fastest way to shorten the timeline is to send complete documents at the start.
If your books need cleanup first, our outsourced CFO services can get the numbers ready and track value drivers after the report.
Documents We Usually Request
- Three to five years of financial statements and tax returns
- Year-to-date results and any forecast
- Owner pay and personal expenses run through the business
- Operating agreement, bylaws, or buy-sell agreement
- Cap table and recent stock or unit sales
- Customer concentration and key contracts
How Our Valuation Process Works
Scoping Call
We confirm the purpose, valuation date, standard of value, and report type, then send a quote.
Analysis
We normalize earnings, study the industry, and apply the income, market, and asset approaches that fit.
Review
We walk you through the draft, check facts with you, and explain what drives the number.
Final Report
You receive a written report built for its audience, whether a buyer, lender, court, or the IRS.
Business Valuation FAQs
How much does a business valuation cost?
The fee depends on scope, the standard of value, and the report type. A calculation for internal planning costs less than a full valuation with a detailed report for a court, lender, or the IRS. Complexity, such as several entities or share classes, also adds cost. We provide a quote after a short scoping call.
How do you value a business?
We start by normalizing earnings so they reflect how the business actually runs. Then we apply one or more of the three accepted approaches: the income approach, the market approach, and the asset approach. Finally, we reconcile the results into a supported value or range.
How long does a business valuation take?
A simple company with clean books and fast answers can be done in a few weeks. Litigation work, multi-entity groups, and engagements that wait on missing records take longer. Sending complete documents at the start is the best way to shorten the timeline.
What is a 409A valuation?
A 409A valuation sets the fair market value of a private company's common stock so it can grant stock options at or above that value. Under Treasury Regulation 1.409A-1(b)(5)(iv)(B), an independent appraisal performed within 12 months before the grant is presumed reasonable, and the IRS can overturn it only by showing it was grossly unreasonable.
What valuation method is best?
No single method is best. Stable companies often suit a capitalization of earnings, growing companies suit a discounted cash flow, and asset-heavy or low-earning companies suit the asset approach. Market multiples help when good comparable sales exist. Most valuations test more than one method.
How to evaluate business worth?
Start with normalized cash flow: adjust reported profit for owner pay, one-time items, and personal expenses. Next, compare that cash flow to sale multiples for similar companies and check it against the value of the assets. Risk factors such as customer concentration or reliance on the owner lower the value.
Ready to Find Out What Your Business Is Worth?
GreenGrowth CPAs provides business valuation services for sales, succession, lending, tax, litigation, and 409A. Schedule a consultation to scope your valuation.
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