Most people asking for a valuation want a number they can defend in a negotiation. A smaller group need a number a third party is required to accept. These are different products, and buying the wrong one wastes either money or time.
The distinction that matters
A commercial valuation is an analysis. It applies recognised methods, cross-checks them, states its assumptions, and produces a defensible range for a commercial purpose. Its authority comes from the quality of the work.
A certified appraisal is an opinion issued by a credentialed appraiser under a defined standard, with the credential and the standard being the point. Its authority comes from who signed it and under what rules.
The analysis inside the two can look similar. What differs is what happens when someone refuses to accept the number.
| Commercial valuation | Certified appraisal | |
|---|---|---|
| Purpose | Negotiation, planning, internal decisions | Tax, court, regulatory filing |
| Signed by | The advisory firm | A credentialed appraiser |
| Standard | Recognised methods, disclosed assumptions | A defined appraisal standard |
| Reader | A counterparty | An authority |
| Challengeable on | Its assumptions | Its compliance with the standard |
| Typical cost | $1,500 to $10,000+ | Materially higher |
When a commercial valuation is the right instrument
- Negotiating a sale or an acquisition. The buyer will run their own analysis regardless. Yours exists to hold a position and to know where you would move.
- Setting a raise valuation. Investors price on their own view. A cross-checked range tells you which of their arguments to concede.
- Buying out a partner by agreement, where both sides accept an independent commercial analysis.
- Internal planning. Understanding what moves enterprise value before you spend 2 years moving the wrong thing.
When you need the one we do not do
We are not certified appraisers and we issue no certified appraisals. If any of these describe your situation, you need a licensed appraiser, and we will tell you that on the first call:
- A tax filing that requires a supportable valuation, including gift and estate matters, where the authority may examine the basis.
- Litigation, or anything likely to become litigation. Divorce, shareholder dispute, a contested buyout. The credential is what survives cross-examination.
- A regulatory or statutory filing that names the standard the valuation must be produced under.
- 409A valuations for US option pricing. These have their own safe-harbour requirements and their own specialist providers, and are a different exercise from valuing the business commercially.
If someone can reject your number because of who signed it rather than what is in it, you needed an appraisal.
What is actually in a commercial valuation
3 methods, cross-checked against each other, with the divergence between them treated as information rather than a problem to be averaged away.
- Discounted cash flow. Sensitive to 2 inputs above all others, so both are stress-tested and shown rather than buried.
- Market multiples. Comparable companies, with the comparability argued rather than asserted.
- Precedent transactions. Actual deals, adjusted for what made them different from yours.
A range where the 3 methods agree is a strong position. A range where they disagree is more useful still, because the disagreement tells you exactly which argument the counterparty will make.
Cost and timing
Our commercial valuations start at $2,500 with a written report in 10 business days. The wider market for comparable work runs roughly $1,500 to well over $10,000 depending on complexity and how much of the underlying financial work has to be redone first. Certified appraisals sit above that range, and reasonably so: you are buying a credential and the liability that attaches to it.
Before you commission either
Answer one question in writing: who has to accept this number, and what happens if they do not? If the answer involves a filing, a court or a regulator, buy the appraisal. If the answer is a person across a table, buy the analysis and spend the difference on making it good.