Determining Your Company's Value If you want to get the right valuation for your business, be sure to find the right valuation expert for the job.

There comes a time in the life of every small business when its owner looks up momentarily from the daily letting of blood, sweat and tears to ask the question: Just what is this thing worth?

Whether you're considering selling the business, recruiting new investors, bringing employees into ownership or gifting the business to heirs, a business valuation can help you put a more precise number on its present and future value. But the valuation of a privately held business--particularly a small company that may not have a lot of comparable statistics in its industry to look at--is an imprecise science based partly on hard numbers and partly on soft figures, such as cash-flow projections and other intangible assets and subjective criteria. How, then, can you be sure you're getting a fair number?

For starters, you need a reputable valuation expert, preferably one recommended by an attorney or accountant you already trust, says Paul Rich, CPA and principal with the business consulting group at Rothstein Kass, a New York City-based accounting and consulting firm. Look for a CPA who is also a certified valuation analyst, or CVA, and who belongs to one or more of the various accounting associations and groups like the American Society of Appraisers, says Rich. Why? "There are rules of ethics in those societies that [members] have to subscribe to." A less scrupulous appraiser might be willing to discount your business heavily to give you the lower number you want for gifting purposes, but you could run afoul of the IRS and find yourself in hot water later on.