Equipment Appraisal Blog | Understanding Machinery Appraisals

A recent market study by Credence Research has projected that the mining equipment market will grow to $30.5 billion by 2023. But what does that mean for your mine and how do you determine equipment values in a changing market? One option to consider is a mining equipment appraisal and how you can use the information and insights in that appraisal report to take advantage of good opportunities without risking your business on a poor risk. Here's more information on how equipment appraisals can help you stay ahead of the curve:

Mining Equipment Appraisal: Where's Your Business as the Market Grows to $30.5 Billion by 2023?

But where is this growth coming from and how will your business meet these changing needs for equipment? Countries that are industrializing are demanding more coal and material goods. Even with developed countries implementing new recycling standards to make the most out of scrap metals, they can't keep up with the demand. As other countries continue to develop, the people have more disposable income and require more material goods to improve their standard of living.

As mining companies continue to grow, they demand more equipment to keep up production rates. Companies that have become stable in the industry are often shifting to more modern and energy-efficient equipment to lower their overhead and improve profitability. Improved worker safety regulations demand healthier equipment with less exposure to greenhouse gasses while they work. This demand is driving mining equipment sales.

When your mining company needs to update its equipment, it may be due to wanting a more efficient machine or better worker safety. But what will you do with the older equipment? One option to seriously consider is selling it overseas to the developing markets. Because they are still growing, they haven't necessarily reached the level of stability where they can purchase new equipment. But at the same time, the equipment that you're done using may sell for higher rates overseas where they're desperate for quality machinery than at home, where other mining concerns are selling their machinery for the same reason you are.

As the market shifts, it can be virtually impossible to determine where your mining machinery will fall in terms of value. Why? Because your job is to get coal, ore and other valuable materials out of the earth, not to try to sell your machinery. Many mining concerns find that hiring in an equipment appraiser with experience in the field is very beneficial. It allows you to determine not only which machinery to sell, but also at what time to sell it for the best possible profits. Because appraisal is all they do, the appraiser can determine a fair market value for your machinery based on current market conditions.

As you can see, by getting a mining equipment appraisal, you can decide better when to upgrade or replace your existing equipment while still getting top dollar for the second-hand machinery you sell. But part of the process is ensuring that you're working with a certified equipment appraiser. Why? A certified machine appraisal specialist has the knowledge, experience and methodology to ensure you're getting the right kind of appraisal for your specific situation.

Though the current price at the pumps may have most Americans smiling, those in the petroleum business know just how difficult a downturn in this volatile market can be to their business. From keeping the crew happy to making fast decisions on whether a possibility is a go or a no-go, the fast changes in this market is enough to make anyone a little stressed. In this post, we'll take a good look at how you can protect your company against volatile changes in the market  and position yourself for the next boom by making wise business decisions based on a proper oilfield equipment appraisal.

Protect your interests with an oilfield equipment appraisal

Know your bottom line

By knowing exactly what your equipment values are, you're able to know exactly where you sit in terms of assets. A qualified equipment appraiser can include an estimated remaining useable life as part of your machine appraisal, giving you a good heads-up on when you can expect to replace aging equipment. They can also point out areas where you may want to start the replacement process, by leaving long-term machine equity until the last for replacement, ensuring you'll get more from your machinery in the used equipment market.

Have a solid grasp of your business' actual worth

Equipment appraisals provide you with a better idea of what your equipment is actually worth, rather than the depreciated value counted on your taxes. During a market upswing, the cost of a particular piece of equipment can rapidly increase, which a qualified appraisal specialist takes into account when providing you with a quality oilfield equipment appraisal. Because you know exactly where your assets stand, you know exactly where you stand to make better business decisions. Even better, a quality machine appraisal is prepared to a specific set of standards, which makes it easier to secure financing using your machinery as collateral, because the bank knows it can trust the machine appraisal as part of an accurate picture of your business' net worth.

Avoid risky propositions

When the guy on the next rig comes along to tell you he's quitting and ask if you're interested in buying him out, do you know whether it's a good idea or not? A machinery valuation is a great way to determine your bottom line, so you know whether you're in a good or bad financial position to take advantage of these situations as they arise. Depending on how your books are set up, you may have a financial picture that is either too optimistic that puts you in danger of losing your business to a bad investment or is too conservative, keeping you from taking advantage of new business and business expansion opportunities when they arise.  Knowing your financial state helps you make intelligent business decisions.

The oil & gas industry is volatile, but your business doesn't need to be. Instead of risking everything on a gut feeling gamble, why not look at having a quality equipment appraisal performed on your oilfield machinery? Position yourself to take advantage of the next upturn and you'll be ready to go while your competitors are still catching up with the market change. By using an ASA-certified appraiser who has received the standards board's Machinery & Technical Specialties, you're ensuring that you'll get a professional machinery valuation that will meet your needs. Contact us today for more details on getting started on the path to making wise and informed business decisions.