One of the most important questions regarding company valuation is who should pay for a company valuation report - is it the buyer of the company or the seller? This article answers the question.

How much does a company valuation report cost?

Before answering the question of who should pay for a company valuation report, how much does it cost to prepare a company valuation report? In our blog post, we responded to this question in detail: How Much Does a Small Business Valuation Cost?

In the blog post, we mentioned the two possibilities for getting business valuations: Expert Valuation and Software Valuation.

Expert Valuation is a company valuation conducted by an expert specializing in companies' valuation.

Software Valuation is a business valuation performed using dedicated software, which company valuation experts developed to enable company valuation quickly, and without mistakes.

An expert business valuation will cost between 1,000 USD - 10,000 USD, depending on how much work needs to be done. 

Software Valuations Cost

The cost of software valuation can range between 99 USD to 1,000 USD. Equitest, for example, allows the user to start the valuation for free - and pay in case he wants the report. The prices of the plans start at 99 USD.

You can start for free here.

The conclusion is simple - between 99 USD and 10,000 USD.

Who Pays For a Business Valuation?

There is an approach that says the company's buyer should pay for the valuation report. This approach might seem nice to the seller. However, it can cost a lot of money to the seller - since there are NO FREE GIFTS.

Two appraisers, who will value the same company, can come to two completely different conclusions regarding the value of the business. 

Company valuation is subject to bias. That is - theoretically, there can be a situation where the buyer can order two valuations from two different business valuers and present to the seller the report with the lower value.

Many times the business being sold is the seller's most important asset. Therefore, it is recommended that the seller present his own valuation, or at least check the valuation he receives from the buyer.

We can answer the two questions - Who Pays For a Business Valuation? Does the seller or buyer pay for a business valuation? - with a straightforward answer - It is best for both parties to be equipped with their own valuation report.

If you are looking for a quick and reliable way to test the value of a company - you are welcome to use Equitest - an AI Business Valuation Software. Start for Free by clicking here.