Building Value Newsletter Volume VIII, Issue II

A Business Valuation Newsletter for Business Owners and the Professionals Who Advise Them

Valuing “Mom and Pop” Businesses A Primer

Is there really a difference between valuing the “mom and pop” Main Street business versus the larger, closely held business that has several owners and appears to be run more like a business? The answer is “yes and no.”

Valuation is valuation – in other words, the valuation analyst attempts to use all three approaches to valuation and tests the various methods that fall under these approaches. They may not all apply, but the valuation analyst who is performing a thorough job looks at the various approaches and methods for all valuation assignments (assuming that it is not a limited valuation or calculation engagement). This does not change, no matter what the size of the business being valued. However, when valuing the very small business, the valuation analyst is often faced with limited records and information that sometimes makes the assignment appear to be more difficult.

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