Equipment Appraisal Blog | Understanding Machinery Appraisals

Ramp up production with a manufacturing equipment appraisal

Posted by Equipment Appraisal Services on Tue, Jun 27, 2017 @ 09:57 AM

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When you work in manufacturing, you know that customer trends and sales can be fickle at times. With the continued economic recovery, many businesses are seeing new growth, but many businesses are unsure how to respond to that growth after the depth of the last recession. How do you figure out when it's time to ramp up production and what assets you have available when it's time to invest in additional equipment, manpower or materials? Here's a quick look at how a manufacturing equipment appraisal can help the process along.

Ramp up production with a manufacturing equipment appraisal

When the market starts to shift in your company's favor, it's very tempting to purchase new equipment, upgrade your existing equipment or expand your operation for additional production. But which one is the right choice for your situation? One way to gain more insight into the issue is by having an equipment appraisal performed.

Equipment appraisals do more than simply determine the value of the machinery, though that in and of itself can be very helpful information. An experienced equipment appraiser looks at a number of factors when valuing machinery which gives you additional insight into when you should expand operations, when you should replace equipment and when simple upgrades may make the most sense. 

One area the appraiser looks at is the machinery's overall condition. Because an experienced appraiser spends time every day looking at equipment, they have a good feel for when the equipment is getting ready to fail. For this reason, they can often determine how much longer the machinery will function, also known as expected useful lifespan. If your machinery is at the end of its lifespan, you may want to replace it. If you have equipment that is fairly new but has been poorly maintained, that will impact the expected useful lifespan of that piece of machinery. If on the other hand, the ancient but well-maintained extruder you have is still in excellent condition, the appraiser may recommend you keep it in production for the foreseeable future.

Another area that is looked into is the market. Experienced appraisers have often seen the market for your sector go through changes. This allows them to estimate the value of your machinery based on market projections. They may be able to share those insights with you, saving you the expense of expanding your operations just in time for the market to downturn, leaving you with machinery that has quickly devalued with the market slowdown. If the market is expected to continue doing well for a period of time, you may be able to replace or upgrade your equipment to allow for faster or more economical production, or simply expand your production to take advantage of the steady nature of the current market.

The US economy seems to be in a solid state of recovery, with growth turning into manufacturer's higher profits. When you get a manufacturing equipment appraisal, you have the opportunity to learn a great deal about the condition and value of one of your business' biggest asset pools: your production machinery. By learning this information, you can quickly leverage that knowledge to decide whether you need to upgrade, replace or expand particular types of equipment to boost sales and profitability. The benefits of equipment appraisal give you valuable insights that help you manage your business more efficiently and with greater flexibility than ever before.

Tags: manufacturing equipment appraisal, manufacturing equipment appraisers

Using a construction equipment appraisal to keep up with current trends

Posted by Equipment Appraisal Services on Tue, Jun 20, 2017 @ 01:27 PM

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As the building industry rapidly evolves, are you keeping up with the changes that are happening? If you aren't, you might not have an accurate picture of how valuable your heavy machinery is in the market. Fortunately, a construction equipment appraisal can help you stay on top of changes and take advantage of growth in the market without subjecting your business to unnecessary risk. Here's how it works out:

Using a construction equipment appraisal to keep up with current trends

Current industry trends in construction primarily focus on one particular aspect of building design: efficiency. The general change in the population towards healthier living, sustainability and lower waste on construction projects mean that today's construction company must provide high-quality, sustainable products and techniques while cutting waste and the end cost of the structure to the client. But how do you keep up with these changing trends? One way is by using well-maintained equipment that holds its value well while providing years of reliable service.

But overall, the construction industry is growing both across the country and around the world. As the industry grows, what happens to the value of your construction equipment? As growth overtakes equipment production, existing equipment becomes more valuable, but to what extent? Many businesses find that having construction equipment appraised helps them understand how their equipment values change over time and how that can impact their overall asset values.

However, with this growth also comes the opportunity to replace aging equipment. But how do you decide when it's time to get rid of older construction machinery? A good equipment appraiser spends all their time looking at equipment and writing up reports on its value. This means that they generally have a good feel for how long the remaining useful life span of the equipment may be. By determining this information, you can decide whether you need to change out that older grader that is getting up in years or whether you want to hang on to the old backhoe you have on site because it's still expected to provide years of reliable service, despite its age. This means you can choose the right time to sell, trade in or donate your older equipment for your business' best interests.

When you know your equipment values, you can also make smarter business decisions. When you think that your equipment is worth more than is realistic, you're more likely to take on risky investments because you think  you have the equipment assets and collateral to back up the investment. But when that investment goes south, you'll quickly discover you don't have the assets to cover the financing you took out for the investment. Conversely, if you think your equipment is worth less than is realistic, you may be missing out on fabulous opportunities because you don't believe you have the collateral or assets to make the investment. That means you won't see the level of growth your business is capable of achieving.

By keeping on top of your equipment values, you can quickly take advantage of favorable trends to grow your business while avoiding investments that could prove too risky. Construction equipment appraisal provides you with a wealth of information about your machinery, from its expected useful remaining life to any range of different sale situations. Make sure you take the time to get this important information today to help protect your business interests.

Tags: construction equipment appraisal, construction equipment appraisers

Using a machine shop appraisal to keep up with current trends

Posted by Equipment Appraisal Services on Tue, Jun 13, 2017 @ 10:38 AM


If there's one thing that's true in the fabrication industry, it's that staying on top of changing market trends is vital to the overall health of your business. But how do you determine where your equipment falls, what it's worth and how you can leverage that value to upgrade your shop to the latest technology? A machine shop appraisal provides you with all the information you need and more to determine your equipment values. Here's how it works.

Using a machine shop appraisal to keep up with current trends

New welders offer an entirely new range of precision, lowering your overhead costs and reducing post-welding cleanup operations. CNC machines deliver a level of accuracy that is virtually impossible to match using traditional metal fabrication tools. Multi-axis machines allow unprecedented access to the piece in progress while providing faster production times. Additive manufacturing gives you options you'd never before considered possible for your machine shop. How do you decide which technological breakthroughs are worth your hard-earned equity and whether you can afford these new tools in the first place? What determines the value of your equipment assets?

One way to approach the issue is through a machine shop valuation. Geared at taking a solid look at the actual value of your machinery, a valuation takes a good, hard look at a number of different aspects that impact machine values. Current and projected future demand for that particular piece of equipment is taken into account, as well as the features and kits available, condition of the equipment itself and what would be involved in terms of cost when removing the equipment for use in another facility. This helps you determine what the equipment is worth to your business and whether it's time to upgrade to more advanced equipment or leave the existing equipment in place to provide additional capability in your fabrication business. 

As an example, many companies are seeing the potential of additive printing, but very few are investing in the technology at this time. However, companies that are investing in this technology are seeing huge gains in their market share for these specialty tools. Though many companies are considering purchasing a 3D printer, they're not sure whether they have the assets available to purchase one that will meet their needs. Equipment valuation can help with this situation, allowing you to determine what equipment you would need to sell or use as collateral to purchase the necessary equipment to finish fitting out your machine shop for solid technological advancement.

By getting a machine shop appraisal, you can gain insights into your overall equipment values and leverage that value to improve your fabrication company's technology assets. But many machine shops make the mistake of simply counting on their equipment broker's word on what the equipment is worth. By using a certified equipment appraiser, you can ensure that the values you receive are backed up by solid methodologies that have stood the test of time in financial, tax agency and legal circles. If you're not currently working with a certified equipment appraiser, you could be leaving money on the table when it's time to buy or sell equipment.

Tags: machinery appraisal, machine shop appraisal

Why ag advancement doesn't equal poor farm equipment appraisal values

Posted by Equipment Appraisal Services on Tue, Jun 06, 2017 @ 03:07 PM

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Farmers are the original economists. Leftover milk goes to the pigs, scraps from the kitchen feed a hungry flock of laying hens and old buckets, barrels and tarps are used time and again to help keep the farm in the black. Old equipment is repaired time and again, and with the cost of new tractors, combines and other machinery, is often considered to have poor market value. However, that's not always the case. A farm equipment appraisal can often hold a surprising amount of value, because advancement in agriculture doesn't mean your old equipment isn't maintaining its value. Here are a few insights into why this equipment often retains its value better than you may think.

Why ag advancement doesn't equal poor farm equipment appraisal values

Drones that release specific amounts of fertilizer or beneficial insects where they're needed most. Bluetooth connectivity in the cab of your John Deere tractor. Precision agriculture to levels of precision that have never been seen before. Agriculture is quickly advancing even as fewer and fewer farm kids are willing to stay on the farm to take over for aging parents. But that doesn't mean that older equipment doesn't have value. 

When it all comes down to it, today's agricultural concern is based on the perfect combination of a few specific elements: soil, climate and the farmer, who manages to work between the other two elements to ensure a successful crop, whenever possible. Having more advanced agricultural equipment doesn't make these two aspects change. For that reason, equipment that isn't as advanced still holds value.

This concept is borne out when farm equipment is appraised by a professional equipment appraiser with experience in agriculture. If your old tractor or combine are from popular lines that are known for their dependability and relatively long life, they may be worth much more than you would think. At the same time, a piece of nearly new equipment known for breakdowns and short useable lifespans may not appraise for as much as you might believe.

But where does equipment valuation fit into the picture? Most farmers can give you a good general price on what they can expect to make per acre, but often completely discount the value of the farm equipment as part of that calculation. However, much like so many expenses in other businesses, this aspect of your farm business shouldn't be overlooked. An equipment valuation performed by a certified equipment appraiser helps you get a better grip on what your farm's assets are actually worth, a necessary figure when you're projecting income or applying for insurance. When you need a loan to get through a bad crop year or two, a properly prepared appraisal report provides you with proof of value that will hold up with your financial institution.

As you can see, having older ag machinery doesn't always mean that equipment doesn't have value. A farm equipment appraisal may seem like something you could handle at the local equipment dealer, but their interests and your interests often interfere with getting a fair market value for your machinery. To get a proper equipment appraisal, you'll want to work with a certified equipment appraiser who has experience with agricultural equipment, giving them the knowledge and training to provide you with an accurate statement of value for your machinery.

Tags: farm equipment appraisal, farm equipment appraisers