Equipment Appraisal Blog | Understanding Machinery Appraisals

If you spend any time looking at the news, you're probably noticing the same thing we are - the more the news says, the more uncertain the market looks. How do you make smart business decisions when the market seems to be in a constant state of flux? Surprisingly, an industrial equipment appraisal may help. But how does knowing the value of your industrial equipment help your business get through these changes in the market? We thought you'd never ask:

Weather market changes with an industrial equipment appraisal

• A poor economy tends to cause a related rise in crime. Having an equipment appraisal helps ensure that you can recover the full value of your equipment from your insurance company when you have a theft at your business.
• A poor economy also increases the number of people who are homeless. We've all heard horror stories about a squatter's fire getting out of control and burning down any number of buildings in the area. A machinery valuation can prove the value of your equipment even if it isn't performed until after a loss.
• Of course, a good economy means governments want to raise taxes. Have you ever received a property tax assessment that was so high as to be completely ridiculous? A machinery appraisal proves the value of the machinery using standardized methodologies that have stood the test of time.
• Tax increases also provide the opportunity for tax deductions when you donate your industrial machinery to a worthy cause. But how do you know how much the donation is worth? Having an appraisal performed provides rock solid documentation of the value of the equipment you've donated.
• Are you considering expanding your business? When the economy was doing poorly when the housing bubble burst, new regulations came into effect to tighten access to business loans. Having your equipment valued provides you with documentation so you can use your equipment - and only the right amount of equipment - as collateral to secure a loan for expansion.
• When the economy is recovering, it's very tempting to upgrade your industrial machinery so you can increase production, improve quality and similar concerns. When you have a machinery appraisal, you know exactly what you can get for your old equipment to help finance the purchase of the upgraded machinery.
• If you're ready to expand your business but have sticker shock over the cost of new equipment, have you looked at used machinery? Having an equipment appraisal on a used piece of machinery ensures you'll know what kind of conditions the equipment is in and won't have any nasty surprises.

Whatever happens with the market and economy, having an industrial equipment appraisal can help you keep your business running smoothly. But where should that appraisal come from? Though you could get a quote from a local dealer, their focus is selling you equipment, which will color their appraisal. They may say your equipment isn't worth much or that it's worth far more than you think it should because they want it as a trade-in. You could look in the local paper, but unless there's another business in the area selling the same equipment you are, it's not going to be an accurate assessment either. Using a certified equipment appraiser ensures that you'll receive an appraisal report that will stand up to scrutiny in legal, financial and insurance circles.

As President Trump has come into office, he's made some promises to America. Part of those promises includes a proposal for spending $1 trillion to update the US infrastructure to help boost jobs, businesses and trade. But how will this proposal impact your business? How can a paving equipment appraisal help ensure you're in a good position to take advantage of the potential growth that may come out of this initiative? Here are a few areas to consider that can help you get your business off on the right foot with these prospective spending proposals.

Infrastructure Upgrades: How a Paving Equipment Appraisal Helps

What shape is your equipment in? What is it worth? Are there better options you should be considering? What will it cost to replace that equipment? As infrastructure plans begin rolling forward, whether it's originating from President Trump's $1 trillion initiative or smaller projects, this information is vital to the success or failure of your business. Why?

If you're considering splitting your crew and building your business through multiple highway contracts, you'll need equity to secure loans for additional equipment. Your financial institution will need assurances that the machinery you're using for collateral is really worth the money they're loaning out against it. An equipment appraisal report prepared by a certified machinery appraiser uses methodologies that have been tested in the court system for decades, so they are viewed as accurate in financial circles.

What if you have an equipment failure while traffic is backed up through a construction zone or you're required to meet particular time constraints for the contract? Because an equipment appraiser spends significant amounts of time combing through paving equipment, they often recognize signs of trouble well before they would otherwise become apparent. This allows you to undertake repairs or replace the equipment before it turns into a logistical nightmare on the side of a highway.

Have there been issues of equipment theft or vandalism in your area? When you receive a paving equipment valuation, you have documentation that holds up well against scrutiny, making it ideal when you need to quickly settle an insurance claim. But what about if the vandalism or theft has already taken place? Many equipment appraisers are able to retroactively value machinery to help businesses settle an insurance claim, even without a prior record of valuation.

But what if you already have a machinery valuation in place? Though it may reflect the equipment values of the past few years, there's a good chance it won't reflect current market conditions. As infrastructure jobs become more common, that equipment's value will rise. A piece of machinery that was worth $35,000 last year may be worth $50,000 next year as scarcity and demand increases its value significantly. Wouldn't you rather know what your machinery is really worth now than what it was worth during the worst parts of the recession?

Spending $1 trillion on infrastructure may seem like a large amount, but when it comes to winning highway contracts, you know that every penny counts. Every difference in supply prices, every minute spent waiting for your crew to get in gear and every penny spent on rental equipment because you've had a break down can quickly eat into your profits, turning a highly profitable highway job into a nightmare that sinks your business. Having a paving equipment appraisal performed on your machinery can make all the difference between these two states.

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.

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.

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.