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The first question you need to ask is, do you need to pay an expert to perform a business appraisal?

If you're a small company or a simple service business with few assets your accountant's assessment may be all you need.

One of the key factors in successfully selling your business will be setting the right asking price. You want to get the maximum value you can for your business. But you also don't want to set the price too high or you may turn off all your best prospects.

Unfortunately, too many sellers set themselves up for frustration by overpricing their company. For this reason many business owners eventually come to the realization that it's worth the money to have an expert appraise the business.

In addition to the confidence you'll have in knowing your not undervaluing or overvaluing your company, a written appraisal - prepared by an expert - can help you justify your asking price when negotiating with buyers.

Expect to pay the appraiser at least $100 an hour. A simple oral appraisal may cost as little as $500. A more detailed written appraisal will run $2,500-$5,000 or more depending on the complexity of your company.

When interviewing appraisers look for one or more of the following professional designations listed below. These designation are not required by law, but a full time appraiser with any experience will probably have one or more of these designations.

Initials Title

C.B.A. Ceritfied Business Appraiser (Institue Of Business Appraisers)

ASA Accredited Seniore Appraiser (American Society Of Appraisers)

CVA Certified Valuation Analyst (National Association of Cerified Valuation Analysts)

If you're going to pay for a written appraisal you should take the time to interview several candidates so you can compare credentials, cost and references.

If you decide all you need is an oral appraisal, you'll likely have to choose your appraiser based on a phone interview. Since the fee is low, most valuation experts won't be interested in going through a lengthy selection process.

When you select your appraiser have him draw up an Appraisal Agreement that spells out the fees, what his appraisal report will cover and the expected time of completion.

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