What is a Business Valuation Software?

A valuation software is a tech tool crafted to assess the worth of a company. It streamlines the task of determining the value of a business offering a method for owners, investors, and consultants to gauge the reasonable market value of both private and public firms.

Essentially this software analyzes a company's financials, assets, liabilities, and performance metrics. It uses data such as revenue, profit, growth patterns, and industry standards in its algorithms and models. The software considers valuation methods like discounted cash flow analysis the income approach, the asset-based approach, and the market-based approach. Emphasizing the importance of employing multiple business valuation approaches ensures an accurate and objective valuation by reconciling conflicting value indications through an independent and objective valuation process. Some advanced programs even employ AI and machine learning to enhance valuation accuracy.

Key features of business valuation software include:

  • Customizable valuation models and automated calculations
  • Access to peer benchmarking data
  • Financial statement spreading and analysis
  • Detailed valuation reports and visualizations
  • Scenario analysis and sensitivity tools
  • Data integration from various sources
  • Collaborative features for team-based valuations

Having an accurate view of a business’s value is critical for several reasons. It allows owners to maximize their exit price during a sale. It provides investors with the data to make informed funding and acquisition decisions. It enables stakeholders to set growth targets and assess performance. Relying on manual processes or gut instinct often leads to over- or under-valuation. Business valuation software brings objectivity, efficiency, and analytical rigor to determine the true fair market value.

Types of Business Valuation Software

There are a few main types of business valuation software available, tailored to different users:

Software for Financial Professionals

Many software tools are designed specifically for financial professionals like accountants, business appraisers, and advisors. These provide robust valuation methodologies and advanced reporting for client engagements. Examples include:

  • Business Valuation Manager Pro
  • ValuSource Pro
  • BizEquity

These tools allow for detailed data input, custom valuation calculations, and professional report generation. Advanced features like transaction database access, benchmarking, and scenario analysis help advisors provide accurate valuations and strategic insights for their clients.

Software for Business Owners

For small business owners and entrepreneurs who want to value their own company, there are more affordable and user-friendly options. These include:

  • ValueMyBiz
  • EquityVal
  • ValuAdder

For those seeking a fast and straightforward way to estimate their company's value, Express Business Valuation offers a light version compatible with other valuation reports, simplifying the valuation process even further.

Rather than complex valuation methods, these tools use proven formulas and earnings multipliers tailored to the owner’s industry and business specifics. The process is simplified, requiring minimal financial and operating details. Instant valuation outputs provide a reliable estimate for owners to understand their business value.

Cloud-Based vs. Desktop

Business valuation software is available both as cloud-based or desktop applications. Cloud platforms offer accessibility from any device, automatic updates, and seamless data integration. Desktop tools provide enhanced data security and customization but may have higher upfront costs and steeper learning curves. The choice depends on the specific needs and technical capabilities of the user.

Benefits of Using Business Valuation Software

There are numerous benefits to using business valuation software compared to using manual valuation methods or hiring a professional appraiser. The following are some key advantages:

Time and Cost Savings

Valuation tools automate many of the calculations and assessments involved in business valuation. This results in a decrease in the time and energy expended compared to spreadsheets or models. Software can complete valuations in hours or days rather than weeks or months. Moreover, this efficiency advantage translates into cost-effectiveness as it diminishes the hours from experts. Additionally, valuation software is available, at a fraction of the expense incurred when engaging a valuation agency.

Reliable and Accurate Valuations

Leading business valuation software utilizes proven methodologies endorsed by valuation authorities. Valuations are calculated based on real market data and benchmarks, not subjective opinions. This results in valuations with greater reliability and defensibility. The software reduces the risk of errors that can occur with manual processes. Ongoing updates also ensure the software reflects current valuation standards and best practices.

Powerful Data Analysis

Business valuation software allows in-depth financial analysis of a company based on user inputs. Key ratio analysis, trend analysis, growth rate projections, and other insights can be generated. These provide a comprehensive understanding of a company’s performance and potential. Additionally, the integration of data directly into valuation software facilitates in-depth valuation analysis, enhancing the production of better analysis and generating comprehensive reports. Data visualizations also allow quick assessment of a company’s valuation drivers. The analytical capabilities of valuation software are far superior to spreadsheets.

Key Features to Look for in Business Valuation Software

When evaluating different business valuation software options, there are some key features to look for that can make a big difference in the accuracy and usability of the software. Opting for all the valuation software that integrates various tools and features into a single suite can significantly enhance the valuation process by saving time, enabling better analysis, and providing professional support.

Valuation Methods

The software should provide multiple valuation methodologies to choose from, such as:

  • Discounted Cash Flow Analysis: Calculates value based on projected future cash flows discounted to present value.
  • Comparable Company Analysis: Estimates value based on metrics from similar public companies.
  • Precedent Transaction Analysis: Uses valuation multiples from recent acquisitions of similar companies.
  • Asset-Based Approach: Values business based on assets owned after liabilities.

Having access to multiple valuation methods allows for cross-checking values and picking the most suitable methodology for each business.

Data Access

The software should provide access to robust databases of peer company data and industry transaction comps. This data is essential for comparable company valuations and precedent transaction analysis.

Ideally, the data should be frequently updated and cover both domestic and international peers to find the best comparables.

Reporting Capabilities

The software is designed to generate a comprehensive business valuation report, ensuring a professional and in-depth analysis that meets the requirements of clients and stakeholders.

It enables the generation of valuation reports tailored for clients, investors, or other interested parties.

Utilizing this software to create a valuation report is efficient and simple making the process of generating reports easier.

Look for report templates, financial exhibits, charts/graphs, and the ability to export reports into presentation slides or PDF formats for sharing.

Automated report generation saves significant time compared to creating reports manually. This feature is particularly beneficial when preparing and reviewing written business valuation reports, offering a time-saving solution for professionals.

Selecting the Appropriate Software for Your Requirements

Choosing business valuation software is essential for obtaining trustworthy results. It's important to select software that effectively supports company valuation, catering to the needs of various professionals and business owners. When selecting valuation software tailored to your needs several key factors should be considered.

Considerations for Financial Professionals

For financial professionals like accountants, CPAs, and business advisors, the software needs to have advanced capabilities to handle complex valuations, including the calculation of equity value. This is crucial for providing accurate valuations for clients, as it involves the allocation of enterprise-level equity value between voting and non-voting shares, the justification of value in hypothetical purchase/sale transactions, and the conversion of adjusted enterprise-level equity value to shareholder-level value with or without dilution. Look for software that:

  • Provides access to comprehensive peer company and transaction data for market-based valuation approaches.
  • Includes commonly accepted valuation methodologies like DCF, guideline companies, precedent transactions, etc.
  • Allows you to customize assumptions and input specific capital structures.
  • Generates presentation-ready reports to share with clients.
  • Integrates with other software tools you use like Excel, QuickBooks, etc.

The software should be compliant with industry standards like IFRS and US GAAP. It also helps to look for SEC accreditation for public company valuations.

Considerations for Business Owners

As a business owner, you need easy-to-use software that doesn't require financial expertise. Seek software that:

  • Has simplified data input and reporting, with easy-to-understand valuations.
  • Allows you to value your business in minutes with minimal manual input.
  • Provides benchmarking to compare your valuation multiples against your industry.
  • Offers different valuation scenarios to forecast how changes impact your valuation.
  • Delivers visual reports that clearly explain your company's value drivers.

Focus on software with an intuitive interface and detailed explanations of valuation concepts.

Scalability and Flexibility

Whether you're a professional or owner, choose software that can scale as your business grows. Seek flexible tools with:

  • Ability to upgrade to more advanced versions as needs change.
  • Scalable pricing tiers to accommodate small to large valuations.
  • Customization for different industries, geographies, business structures, etc.
  • APIs and integrations to connect with other software and data sources.
  • Options to add user licenses and locations as your firm expands.

The software should adapt to your current and future valuation needs.

Data Input and Management

Seamless data input and management capabilities are crucial for business valuation software. The software should allow for easy importing and exporting of financial statements, tax returns, and other documents needed for the valuation.

Look for software that offers:

  • Simple data uploads: Drag-and-drop importing of Excel, PDF, and other files speeds up the process. Software with pre-built templates and forms makes data entry easier.
  • Automated data integration: APIs and connectors that integrate directly with accounting platforms like QuickBooks reduce manual work.
  • Flexible data editing: The ability to manually enter and edit data gives control over inputs. You may need to normalize historical financials or project future performance.
  • Secure data storage: Cloud-based valuation software should have bank-level security, encryption, and access controls. No business or customer data should be at risk.
  • Collaboration features: Allow partners and clients secure access to update data and view reports. This facilitates real-time collaboration.
  • Customizable exports: Presentation-ready PDF, Excel, and PowerPoint reports that convey analysis and conclusions in a professional format.

Choosing software that centralizes data needed for valuation in a secure and shareable system saves time and enhances accuracy. The right tools connect disparate data sources and enable seamless transfers for a streamlined workflow. Including business valuation resources within the software empowers users with expert insights and news for improved financial practices.

Valuation Methodologies and Calculations

Business valuation software utilizes various methodologies to determine a company’s value. The three main approaches are:

  1. Asset-based approach: This methodology determines a company's value by aggregating its asset value typically at market rates. Notably this approach also takes into account 'liquidation value' as a metric, in establishing the minimum business worth. Businesses are assessed not only based on their current operational value but also considering the potential worth of their assets, in case of liquidation.
  2. Market-based approach: This method evaluates a company's worth based on the prices at which other companies are being sold in the market.
  3. Income-based approach: This determines a companys value by examining its ability to generate income.

Asset-based approach

The asset-based strategy centers on examining the company's statement by calculating the current market worth of its assets and debts. This comprises of assets such as real estate, stock, and machinery alongside intangible assets like trademarks, patents, and brand reputation. This method provides a valuation foundation. Is particularly suitable for asset-heavy businesses like real estate firms or manufacturers.

Income-based approach

The income-focused method involves analyzing a business' statements and cash flow. Techniques such as the discounted cash flow (DCF) model or capitalized earnings are applied to gauge the value of earnings. This approach works well for firms that have cash flow forecasts.  It helps account for growth potential and the time value of money.

Market-based approach

Also called the relative valuation approach, this methodology derives value from comparing the company to industry peers or precedent transactions. Multiples like the price-to-earnings (P/E) ratio are applied to the company's metrics to determine valuation ranges based on public and private data. The market approach works best for companies with many comparable peers and substantial transaction data available.

Business valuation software will typically include all three approaches to provide the most accurate and defensible value estimate. The results are then weighted and synthesized for the final valuation output. More advanced programs can even test various assumptions and scenarios to model different valuation possibilities. Choosing software with robust valuation methodologies ensures business owners and advisors get the full picture.

Reporting and Analysis

Business valuation software allows you to generate professional reports to share your valuation findings. The best programs provide customizable report templates so you can include the most relevant information for your audience.

Look for software that offers:

  • Customizable templates - Build reports tailored to your specific needs. Select from preset formats or create your own layouts.
  • Visualizations and charts - Display your valuation data visually through graphs, charts, and infographics. These make trends and insights more digestible.
  • Multiple export formats - Export or print reports as PDFs, Word docs, Excel sheets, PowerPoints, and more.
  • Collaboration features - Securely share reports with colleagues and clients. Allow real-time collaboration through cloud-based platforms.
  • Version history - Store previous versions of reports to track changes over time. Compare valuations year-over-year.
  • Custom branding - Incorporate your own logos, color schemes, and designs into generated reports. Maintain brand consistency.

Robust reporting and analysis features elevate business valuation software. Look for a solution that goes beyond calculations to provide impactful and professional presentations of your valuation conclusions. With the right software, you can create reports tailored specifically for your clients and your business.

H2: Training and Support

Business valuation software is only as good as your ability to use it properly. That's why the top options provide comprehensive training resources and responsive customer support.

Look for software that offers:

  • Detailed user manuals and getting started guides to walk you through the basics. Video tutorials can also be immensely helpful for visual learners.
  • FAQs and knowledge bases with answers to common questions and troubleshooting tips. These self-help resources allow you to find solutions 24/7.
  • Webinars and live training sessions to learn directly from valuation experts. Ask questions and gain insights from experienced users.
  • Direct email and phone access to customer support representatives. Get personalized assistance when you encounter problems.
  • User forums and communities to connect with fellow customers. Learn from each other and share best practices.
  • Regular software upgrades and maintenance. Stay up to date with the latest features and functionality.

With sufficient training resources and readily available support, you can leverage the full power of your chosen valuation software with confidence. Invest time upfront to learn the ropes, then reap the rewards through accurate and efficient business valuations.

Industry Trends and Developments

The business valuation software landscape is rapidly evolving to leverage new technologies and integrate with the broader financial tech ecosystem. Some key trends shaping the industry include:

Artificial Intelligence and Machine Learning

Many leading valuation software companies are incorporating AI and machine learning capabilities to automate data analysis, identify valuation comparables, and fine-tune valuation algorithms. For example, machine learning can analyze thousands of comparable transactions to detect subtle predictive patterns and apply those insights to valuations. This can lead to more accurate and unbiased valuations.

Cloud Computing and SaaS

Valuation software is transitioning to cloud-based delivery rather than traditional desktop applications. The SaaS model provides anytime, anywhere access without large upfront investments in technology. It also enables seamless software updates and maintenance. Cloud connectivity allows for real-time data syncing across devices and integration with other platforms.

Integration and Consolidation

Valuation software is increasingly integrating with CRM, ERP, accounting, and financial planning systems. This consolidation enables seamless data flows and a holistic view of the business. Open API architecture also allows third-party integrations. Valuation data can also be embedded into dashboards, reports, and workflows across the tech stack.

Mobile Accessibility

Mobile apps and responsive design provide valuation capabilities on the go. This allows business owners and advisors to view reports, modify assumptions, and collaborate on valuations from anywhere. Mobility and portability are key enabling factors of the cloud transition.

Big Data Analytics

By leveraging massive datasets, valuation software can uncover insights and trends difficult to detect manually. This can enhance accuracy and provide dynamic competitive benchmarking. Expanding access to transactional data, market data, and corporate filings can power next-generation analytics.


Blockchain has potential applications in valuation through its data integrity, security, and decentralization capabilities. Blockchain-verified financial data and ownership records could enable new valuation approaches. Smart contracts can also automate multi-party valuation activities and data sharing.

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