Should I get a formal valuation done, or is a broker's opinion of value enough?

It depends on what you need the number for and how much is riding on it. A broker's opinion of value is generally faster and less expensive, and it's often enough to set an initial asking price and start testing buyer interest, especially for a straightforward, smaller business. A formal valuation, typically prepared by a Chartered Business Valuator, involves a documented methodology and is built to withstand scrutiny — useful where the number needs to hold up under challenge, such as a dispute between co-owners, a family succession, certain tax situations, or a sale to a sophisticated buyer who will bring their own advisors.

The trap is assuming a broker's opinion carries the same weight as a formal valuation if a disagreement arises later, whether with a co-owner, a family member, or a buyer's advisors questioning your numbers. An opinion of value is a useful market read, not a defensible, methodology-backed report.

If your situation is simple and low-conflict, starting with a broker's read is reasonable. If there's real complexity, co-ownership, or a chance the number gets challenged, a formal valuation is worth the added cost. A business lawyer can help you think through which situation you're actually in before you decide.