The Role of Vocational Consultants in Small Business Valuations

Sims, J. Matthew. 2007. “The Role of Vocational Consultants in Small Business Valuations.”  The Earnings Analyst  9: 62-79.


Sometimes in personal injury and wrongful death cases, the plaintiff is a self-employed individual. In addition to lost profits and other economic damages claimed and evaluated, there may also be a loss to the value of the business. The business valuation aspect of a case is typically assigned to a business appraiser, who may estimate the owner’s or a potential owner’s earning capacity. Unfortunately, the earning capacity of the individual is sometimes confused as dividends, or fair compensation is used instead of the individual’s earning capacity. When this occurs, the business valuation’s construct validity diminishes. As such, there is a role in the small business valuation process that the vocational consultant can undertake.


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