What affects the cost of a business valuation in Canada?

The BDC and CBV Institute pages cited here do not publish a price for a business valuation. What they do describe are things that bear on the cost. If you are an owner planning a sale or a buy-out, these are the questions to put to each valuator you ask for a quote, so you can compare like with like.

Level of detail and assurance

BDC says valuations can be done with varying levels of detail, and that each comes with a different cost and level of assurance that the result accurately reflects your company’s worth. A quote for one level is not comparable with a quote for another. Ask each valuator to name the level and say what assurance it gives.

Scope of the work

The CBV Institute says its Practice Standards address the amount of work required, how an engagement is conducted, how conclusions are communicated, and the nature of file documentation to be maintained. For a CBV, then, the amount of work is not only a matter of the fee quote. Ask what is included in the fee and what would be billed separately.

Your information and access

BDC says valuators often need to make on-site visits, meet key personnel and ask follow-up questions, and that you must be ready to share detailed information and work collaboratively. If your records are disorganized, ask whether that adds to the time the valuator expects to spend. Having records ready is something you control.

The purpose of the valuation

BDC says the most suitable combination of methods and level of detail depends on the purpose of the valuation and the company’s characteristics. Tell each valuator what the valuation is for, so the quotes cover the same purpose. See what a valuation report includes and getting a valuation before selling.