Equipment Appraisal Blog | Understanding Machinery Appraisals

6 Areas Considered in a Food Production Equipment Appraisal

Posted by Equipment Appraisal Services on Thu, Sep 17, 2015 @ 11:00 AM

There's no doubt that there is value in having a food production equipment appraisal done to determine your equipment values, whether it's to back a new loan for expansion or because you want to get a fair price for your business. But when you're using your equipment on a daily basis, what areas will impact your machinery valuation? Let's take a look at the top areas considered when food production equipment is put through a machine appraisal and how much they impact the equipment value.

6 Areas Considered in a Food Production Equipment Appraisal

  1. Age of the Equipment. Though you might assume that this would be one of the biggest areas of concern, it often doesn't have as much of an effect as you would expect on a machinery and equipment appraisal. Older equipment in good condition that provides general services, such as mixers or ovens, and which also has a regular supply of repair or service parts available can often go for as much money as a less well-known brand that is newer but is harder to repair or isn't considered a premium brand.
  2. Condition of the Equipment. Has the equipment been well-maintained? Are any repairs up to date? If the equipment is in good condition and has been taken care of, the machine appraiser knows that it will last longer and so will receive a higher appraisal value. Beyond simple cosmetics, this includes routine maintenance, so having a maintenance and repair log helps prove the quality of care the machine has received over time.
  3. The Equipment's Features. As time passes, features that may start out as upgrades or options tend to become standard as competition demands new features. Depending on the age and type of the equipment, it may have more features than other models that are available, leading to a higher value when equipment appraisals are performed.
  4. Any Kits or Upgrades. Does the equipment have additional, manufacturer-approved kits or upgrades added? These features will help improve a food production equipment appraisal. Missing equipment, such as safety guards, and kits or upgrades that do not meet the manufacturer's specifications can actually decrease the value, as they may put too much strain on the motor or compromise the equipment's safe usage.
  5. Current Market Conditions. Beyond simple supply and demand, what are the current market conditions? Equipment appraisers take into account a slowdown in your industry because it will create less demand for used equipment as other businesses sell off their food processing machinery, lowering your machinery's valuation to reflect those conditions.
  6. Demand for that Particular Equipment. Has there been a sudden surge in popularity of a particular piece of equipment? If it's been selling quickly or for more than the appraised equipment market value, this is taken into account when a machine appraiser provides you with a machinery and equipment valuation, especially if it appears to be a long-term demand rather than a short-term craze that will die out fairly quickly.

When you're considering food production equipment appraisal, make sure you're getting a quality appraisal performed. An appraisal performed by someone who is not qualified or who uses unqualified methods won't help when you need to get financing, have a merger or sell your business, because it's not been completed using recognized standards. Always use an equipment appraiser who is a Machinery & Technical Specialties accredited appraiser through the American Society of Appraisers and who uses the Uniform Standards of Professional Appraisal Practice.

Tags: food production equipment