There are three steps to the Business Certified Appraiser (BCA) designation

  1. The training course
  2. The written exam
  3. The demonstration report submission for peer review
The Training

The math involved in learning how to appraise a business is not ‘rocket science’, nor does one have to be a CPA or have an accounting background. Learning how to read financial statements is a very useful skill, but most of the training is about learning the mindset of an appraiser; how to think in a logical manner to take data and draw conclusions that affect the final determination of value.

This is a basic mathematical formula used very often in business appraisal assignments. The variables are simple, but determining them is not as easy.

Should one measure value using Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) or reported net income, or some other measure of income?

How does one select a risk rate? How do multiples work? Is a 5 times multiple always appropriate for use?

Business brokers sell businesses, and much of that market data is reported to various databases that a business appraiser may access and include in an analysis.

Not all brokers calculate certain numbers the same way.

Not all transaction databases report the data in the same way.

Not all comparable data is as comparable as it looks at first glance.

Sometimes, we are asked by a client to determine the value of a small percentage of a business, instead of the whole business.

There are no valuation methods that can be used to directly measure the value of a 25% ownership interest in a privately held company.

Instead, we must use the methods we deem appropriate, then modify the conclusions with the appropriate discount(s) for Lack of Control or Marketability in order to arrive at the required value conclusion.

Sometimes, there are additional discounts that need to be selected and supported as well.

We will discuss balance sheets, income statements, and statements of cash flows. We will talk about why they are important and how they interrelate. We will also discuss financial ratios and how to use them to compare the subject business to the industry average, and why we need to do that.

The Written Exam

After completing our training course, the option to schedule your final exam becomes available.

The written exam is taken through the Pearson Vue testing center. You may schedule it through their online platform, or in person at a testing center.

The exam consists of about 70 multiple choice questions and students has three hours to complete the exam.

The Demonstration Report

The final step, and the most difficult, is the writing and submission of a demonstration report.

This final step is important as it demonstrates the student’s understanding of the theory and techniques required to prepare and support a conclusion of value.

The ISBA has a case study one can use, or one may appraise another business they have available; maybe a family member owns a business they would allow be appraised.

Once the report is submitted for peer review, it will be read by an experienced appraiser who will provide feedback on both things that were done well, as well as sections that can be improved, and areas that failed to meet expectations.

A report may be resubmitted after corrections have been made.

Near the end of the Business Certified Appraiser (BCA) training program, we have a recorded webinar presentation that may be viewed where a submitted demonstration report was made available for public scrutiny. Viewers of this presentation will see what kind of feedback the author received.

Learn how to derive and support a conclusion of value for a small business.

Enroll in our course to begin your journey to obtain the Business Certified Appraiser (BCA) designation!